Archive for October, 2007
Ian’s Marketing Presentation
Friend and fellow digital media guru, Ian Schafer, just posted his presentation from The Next Big Idea Conference. Take a peak below; I especially like slide 22.
Web Traffic Research (Compete & Alexa)
I’m on a web-traffic research kick lately and have been reading up on companies like Compete and Alexa (amongst many others). I wrote a blog posting a few weeks ago talking about when web stats don’t match up on campaigns (buy/sell side impressions) which can cause a major headache in advertising campaigns. As you know, when placing media buys across sites, you want to know as granular traffic numbers as possible so you can justify why you’re spending the amount of dollars you’ve alloted. If you’re looking to reach the 18-25 year old female, then you want to make sure you’re receiving that audience. If not, you’re paying for wastage. The goal of any media planner is to minimize wastage as much as possible, while still delivering a contextually relevant campaign.
Guy Kawasaki of Garage Technology Ventures and founder of Truemors, interviewed the CEO of Compete (Stephen DiMarco) and I found it extremely interesting. I’m also partial to Guy because he was the first evangelist at Apple, a brand that I love.
Some of the points that Stephen touches upon (full article here):
- We have a diverse sample of 2,000,000 U.S. Internet users that have given us permission to analyze the web pages they visit and ask them questions via surveys.
- A great example is the work we’re doing in the truck segment for auto marketers; this segment is an all-out battle between Ford, GM, and Toyota with nearly a billion dollars of advertising spent each year. We’re using online behavior to predict the number of people shopping each truck in the category to understand how campaigns are swaying shoppers throughout the month. This helps auto marketers map how cost effective their advertising is, and guides whether they need to up dealer incentives or increase advertising to hit their monthly sales target.
- How is Compete different from Alexa?
- We like to say to say that more is better—and by measuring 2,000,000 U.S. consumers each month, we’re substantially bigger than Comscore. Our larger sample gives us more reporting depth and we feel our results are more accurate because we measure one million websites compared to the 15,000 that Comscore Media Metrix measure. There is incredible value in being able to accurately measure the “torso” of the web—sites in between the head and the tail—we’re better at this than Comscore because our sample is so much larger and we see things that their data just doesn’t pick up. We also have an accuracy advantage because the diversity of our data sources helps us identify and eliminate biases that show up from time to time. Our multi-source approach is a big point of differentiation—no one else in the market can do it—transforming more than ten different data streams into a common format and then performing statistical projections across 2,000,000 people on a nightly basis is no small feat.Alexa is a storied internet brand, but unfortunately a big part of the story is how bad its web traffic estimates are. Unlike Alexa, we go through a rigorous panel selection and normalization process that involves an independent RDD survey, demographic scaling and extensive QA from our data operations team. Alexa, on the other hand, has a single source of data—its toolbar—so it’s very susceptible to bias. In fact, we often get emails from companies offering to increase our Alexa ranking by downloading tons of toolbar and then visiting our site!
Straight from the Compete blog, here is what they say vs. Alexa.
Fundraising: Debt Microfinance
There are two ways to go about raising money, thru debt and equity financing. We hear a lot about equity financing (venture capital, etc), but debt is certainly popular, just not as sexy. I came across Zopa this morning which helps people or companies increase their debt I mean, raise debt funding.
There are a few emerging players in this space, specifically, on the social giving side (Prosper, Kiva) . Zopa doesn’t look too social oriented, being that there is a company (Billster) who is raising money for a new marketing campaign. Is this the new fad for raising money for startups? What’s interesting is that I’d assume most of the lenders aren’t accredited investors, but I’m not sure about what the SEC rules are.
For this model to work for lenders/borrowers, there has to be targeted traffic coming to Zopa and a high propensity for the traffic to make loans or to list their needs.

As for right now, the traffic is fairly modest but is increasing month/month. I am not sure which lending site will ultimately win out as the best place for debt financing, but since Zopa is well designed, it may have a chance.
Got an email tonight from a friend who noticed me on a list of Top Web Celebrities. I share some good company on the list, including Kevin Rose (Digg), Jason Calacanis (Serial Entrepreneur), Mark Zuckerberg (Facebook), and others. Not bad company to keep.
I’ll be speaking in Zurich on November 7. If anyone is going to be in Switzerland from the 7-9th, I’d love to get together with you. Feel free to reach out and we’ll coordinate.
I installed a new theme on my tumblr log this evening, Ramblings. Thoughts? Also, there are some great new pics and thoughts posted. You know it’s Fall when pumpkins are out.
Holiday Gift Guide 2007
Entrepreneurs are a rare breed; we never seem to have enough time to finish our business plan, work on due diligence requests from VC’s, or to stress test our upcoming release… but for whatever reason, we seem to have everything we need.
This means: t-shirts from 10 years ago, pens from the 1 cent bin at CVS, a single pair of shoes that have been to a combined 50 events (weddings, bar mitzvahs, trade shows), a blazer that used to fit over our beer gut in college, and the same inspiring books that are collecting dust on our coffee tables.
The holidays are just around the corner and with about 60 days of shopping left before the big day, I thought I’d compile an entrepreneur friendly list that you can send out to your friends and family. Most of the items aren’t something an entrepreneur would buy, but I can almost guarantee they need them. Whether you’re the wife/girlfriend/boyfriend/partner/friend of this rare breed of human [entrepreneur] these should be some solid items that you cannot really go wrong with purchasing. Items range from $14 - $650 though most fall within the $25-100 range.
Please note that I’m not financially motivated to recommend one item over another. I am getting ZERO kick-backs. These are purely items that I think would benefit entrepreneurs and should inspire some ideas of gift giving. If you have any product/service ideas that should be included on this list, please contact me as I’ll be releasing another list much closer to the holidays.
Clothing
Calvin Klein Short Sleeve Cotton T-Shirts: we’ll never admit it outright, but the majority of us wear regular t-shirts under our button-downs. Because of this, the imagery on our t-shirts show thru and it looks terrible. Check out these extremely affordable undershirts that are soft and light… guaranteed to be a hit and something the typical entrepreneur would never buy. Helps out big time when you’re pitching VC’s and your nervous as ever… don’t let those sweat stains develop!
Hugo Boss Black Lawrence Dress Shirt: classy yet snazzy. With a black shirt, you can’t go wrong. It’s trendy enough to wear it out at night but conservative enough to wear to your Series A funding dog-and-pony-show. Make sure you don’t have dandruff because it certainly shows up on black, but black generally makes everyone look healthier. Not a bad choice at all.
Island Soft 3 Button Charcoal Blazer: You need a blazer so you might as well have a nice one. While not the cheapest, this blazer is versatile: you can wear it to your next meeting with your advertising clients, to your first board meeting, or to your hot date at Gramercy Tavern. While not the cheapest on this list, you pay for quality. Goes great with the black button down featured above (Hugo Boss). You’ll score big points at the upcoming nextNY event or NY Tech Meetup because you’ll be better dressed than 99% of the room.
Bacci Bucci Shoes: How scuffed are your current shoes? Look down. Are these the same shoes that you walk down Astor Place in and also, Rivington? If you then wear those to Central Park, then it’s time for new shoes. These should be your special shoes that you wear when you have your biz dev/corp. dev meetings. Why? Because when you sign that big deal, you want to look down at them and see your smile. If they aren’t shiny, then you need new ones. These shoes fit the blazer and shirt perfectly and as a bonus, they’re extra comfortable.
Office Enhancements
I never recommend giving a gift that would be strictly for the office as one could usually buy with a corporate card, but these are enhancers. If you’re jumping from startup to startup, or want to give something a bit better than one would receive as standard issue, consider the following:
Moleskin Pocket Ruled Notebook: The great authors wrote in them. Why not you? Whenever I write in mine, my IQ jumps 10 points. They survive the rough handling of your bags, the spills of frappucinos, and can contain pages of complex notes- certainly should be on your list. Comes in all sizes – I prefer the smallish ones and generally go through at least 1 per month. Beats legal pads or the schwag you get from Ad:Tech!
Porsche Design Aero Pen: Other than the really cool factor of owning a Porsche pen, I have always found that having a nice pen brings good luck. When you’re signing your Series A documents or selling your equity over to your acquirer, signing with a luxury pen makes the day that much sweeter.
Magnetic Business Card Case: Always be closing. If Boiler Room/Wall Street is right, then having your business cards on you all the time is imperative. Instead of putting them in your pocket only to have the corners creased, put them into a nice case that can be pulled out in crowds with positive appeal. The case is small yet firm and will protect enough cards that should last thru DEMO or TechCrunch 40. Not only will it hold your cards, but it’ll keep the biz cards from the associate you just met from Union Square Ventures, Sequoia and Kleiner.
Brendhaven MetroLite Green Bag: You’ve just walked into the office of DFJ Gotham and put your nappy bag down on their beautiful conference table. In walks Tim Draper and he’s looking at your dilapidated bag on his furniture… good start to the meeting. Start strong. Walk in with confidence. Have a nice bag holding your goods. I like a little color in my bags as it livens the mood, but that part is totally up to you. This bag has some extra compartments to hold your iPhone, business card case, and to protect your Aero Pen. Cool. If you’re still using your LL Bean bag from 5th grade, time to change. Trust me, it’s for the better.
Miscellaneous
Eagle Creek Comfort Travel Pillow: Red-eye’s on JetBlue or Virgin America aren’t exactly the most comfortable… your neck is almost guaranteed to hurt the next day when you’re sitting in Accel’s boardroom or eating at Buck’s of Woodside. An extremely cheap investment of under $20 could net you a good night’s sleep and a healthy neck. You certainly want to look into this.
Starbucks Gift Card: Buying $4 latte’s isn’t in the typical startup budget, but having a venti in hand is surely comforting. If you’re bootstrapping and working out of random Starbucks, this is really helpful. Now you can afford to talk to different angel investors and buy them coffee… also, there is no shortage of Starbucks in NYC.
Ansel Adams: Our National Parks: Everyone needs a little inspiration once in a while. Ansel Adams is a world-renowned artist and photographer and much of his work can be found in very cliché spots. The national parks are absolutely gorgeous and are extremely vast… the ability to inspire anyone. If your new Adobe AIR app isn’t functioning correctly, and after 9 hours of staring intently at it isn’t giving you any insights as to why, step back and flip thru the book… it’ll surely take your mind off of the code.
Startup: A Silicon Valley Adventure: The book that initially inspired me to create something great… a great memoir/diary of a technology company pre-bubble in Silicon Valley. It’s amazing to read other people’s trials and tribulations and learn from them… a quick read and something anyone would appreciate who is related to the technology industry. It’s an older book (90s) so you can get some copies used (and cheap). I’ve recommended this book at almost every entrepreneurial speech that I give.
Gotham Dream Car Gift Certificate: This gift is for anyone who has an appreciation of automobiles. If you’re looking to rent an exotic car for the weekend getaway or to join GDC’s next Dream Car Tour, this is an amazing gift, one that the entrepreneur wouldn’t buy himself or herself. Luxury this is, not something that benefits the company perse, but could give the entrepreneur the once in a life-time experience or the motivation to go public or sell that social network they are building to buy these cars outright.
High-End Stationery: If you’re looking to give the uber personal present, high-end stationery could be right up your alley. After every VC pitch, you should be sending thank-you notes. You should be writing to your business development partners. Get off Twitter, Facebook, and email and go long-hand. We’re entrepreneurs, go against the grain. Stationery is making a comeback. The person I’m referring to here doesn’t have a website and handles holiday cards, invitations and stationery out of her private office in Westchester, NY. Click the link to contact me for the info… by appointment only.
Feel free to share this with your friends and family… also, let me know your thoughts as to what should be included. The more, the merrier… happy holidays, they are right around the corner.
Welcoming Fall…
For whatever reason, I feel like fall arrived today here in Westchester County. As I drove around, the leaves were changing color to beautiful reds/yellows and pumpkins were being sold at all the markets. It’s an absolutely beautiful season and also, one of my favorites.
Fall stands for quite a bit, but most notably: change. Leaves change color, menu’s change at restaurants, clothing options change, and even time changes (daylight savings). Fall keeps you on your toes and gets you ready for a challenging season: winter (my favorite). Lots of changes ahead and in due time, they’ll become apparent. I look forward to sharing with everyone!
If you’d like to view a fall foliage slideshow on Flickr, click here.
One amazing thing about fall: Dave Matthews Band is coming back for one more show on November 13 @ IZOD stadium. You can bet that Sherri and I will be there…
Category: Darren Herman
Dot Com Deadpool Fund
With all of the money chasing startups, the deadpool is getting larger by the day. Companies are going to be dropping like flies in the next 365 days as they run out of cash. During the ‘01-’03 bust, I wanted to purchase failed dot coms and bring them back. I had a grand plan and talked about it to my inner circle of friends and colleagues… but never did it.

I don’t know if I’d do it now, but I’d be interested in exploring ways to go fishing in the dot com dead pool. Makes you wonder… a lot of interesting technology is being built and could be leverage.
Video Games & Culture

This image was pulled from the Flickr gallery of LynetteR. My friend Greg pointed me in her direction when I was reading through my RSS feeds last night.

There are two companies that I’ve been watching closely, GameStop (GME) and NetFlix (NFLX) because their current business model has about 3-5 years before they begin seeing significant decreases in their revenue. Currently, the two of them account for over $10.58billion worth of market cap so as investors and consumers, we certainly like them.
Their current business model needs to change. Digital distribution of files (games or movies) are not “if” but “when” and as long as it’s easy for the consumer to download. GameStop sells video games and peripherals in their retail stores but as games become distributed on the Xbox Live, Sony PS3, and Wii platforms, the need to walk down the street to a retail store will become less and less.
NetFlix is experiencing business model disruption because I can access movies on-demand from my cable carrier and watch whatever I’d like, on demand. It’s only a matter of time until my cable carrier has enough movie inventory available for me to watch that NetFlix becomes extinct.
In October 2006, GameStop publicly recognized this issue and announced the opening of their digital distribution service. In January 2007, NetFlix made their respective announcement about digital distribution.
I’d like to see one mega-store that has everything online that can be downloaded. Why seperate out music from movies and games? Why not all together? Is it going to come down to rights? Will Sony go in one direction and EA go in another? If so, the market is going to be fragmented and you’ll have bidders trying to “buy” inventory from these respective rights holders.
Also, keep your eye on the ecosystem of digital distribution. Who provides the infrastructure to enable the distribution of digital downloads to happen? The storage? Bandwidth? Payments? Rights?
I’m curious to see how it plays out.
Congrats Apple, 2M Units Sold
I’ve been a huge Apple fan since day one. It’s been a long time coming, but Apple is transitioning from a niche rogue computer maker to a lifestyle technology provider. I’m excited where Apple is going.
Here are details from today’s market:
- Profit rises 67%
- Mac Sales top 2.16 million units
- 1.11 million iPhones
- Quarterly profit of $904 million
This is a very strong quarter for Apple. One thing that I must reiterate is that Apple must not forget about the following:
- Not alienating it’s core customer base (their loyal fans that kept them alive time and time again)
- Keep their retail operation growing with the best customer service of any company unlike Verizon
As long as Apple keeps the above up, the sky is the limit. I’ll be buying a new iMac on Saturday/Sunday for Sherri when Leopard is released… that’ll help your next quarter.
Category: Technology

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