Category Archives: Technology

The Integration Company

I was on the phone with a founder of a major data play within the digital ecosystem this afternoon.  We were discussing the next 12-24 mos of acquisitions and who the big players will be.  This post is not about who will be acquired or do the acquiring, or the bankers who will make some good dollars off the deals, but rather the single most important part:  Integration.

There is no doubt that there will be mergers and acquisitions.  The main reason why deals fail is because the integration between the two companies doesn’t happen.  There are a slew of reasons for this, but most of the time, culture and mismanaged expectations are what drives companies not to integrate well.

If I were going out on my own and wanted to start a services organization, I’d build up a company specifically geared toward making integrations work and take a % of the deal for compensation.  I’d have a team of ad tech and business professionals who have been through it before and make sure that all the boxes are checked around a solid integration.

There will be no shortage of M&A in the ad tech space in the next 12-24 mos so this should be a nice opportunity

Android to Apple

As many of you know, I switched from my iPhone 4 because I wanted to immerse myself in the Android world, so I bought a Samsung Charge, switched from AT&T to Verizon, and went cold turkey on iOS.

As of around 11pm last night, I’m back on the iOS platform as I got up and running on my new iPhone 4S.

Reasons why I switched back:

  • I found that I didn’t want to have to “work” to make my phone optimal.  I ended up having to manually do many things on the Charge to get things the way I wanted them.
  • The battery life was terrible.  I went thru between 2-3 batteries on any given weekday (work) day.
  • The phone was not refined; I couldn’t change things like the font on my email and the on/off switch was where my thumb touched when I held the phone which caused me to power on/off at sub optimal times

Things I learned about Android:

  • It wasn’t as hard to get up and running as I expected.
  • It actually looks pretty sweet (except for the startup screen, which is scary)
  • The App Store is pretty robust.  I was pleasantly surprised that the only App I couldn’t really find was Instagram
  • Loved the integration with Google Apps

I’m excited to be back.  Any iOS apps I should be downloading? I’m looking for a solid RSS app.

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Building a Data Empire On Your Back

This post was inspired by an email conversation between Taylor Davidson, Adam Liebsohn, and myself early this morning.  Taylor works at kbs+p Ventures and Adam is the founder/ceo of a startup called VoyURL.

“The best way for a startup to get a dataset like that is to create some sort of self-expression platform, a way to express what you’re into …,” says Lavingia, who also designed the Turntable.fm iPhone app. “You can’t directly ask users, ‘Hey we’d love all of your data! List the songs you like and the albums you’ve bought and the places you’ve visited and the food you’ve eaten.’ But you need these answers to ultimately make money.”

The above quote comes from a post on TechCrunch titled Pinterest Joins Twitter and Facebook As The Newest Self-Expression Engine.  It’s hot on the heels of a few other posts (BloombergBetabeatUncrunchedTechCrunch) that talk about how Facebook and the like are building massive data assets on the backs of consumers and reselling them to advertisers.  Consumers for the most part, are not fiscally compensated, but some of the technology services can argue that they are getting value in exchange for their data.

Bloomberg’s latest headline, “Getting Rich From Others Has Never Been Easier,” pretty much sums it all up.

I think there’s an expression, “there’s no free lunch in life.”  When was the last time you signed up for a service and wondered how it was making money?

For the next 24 hours, look at all the sites you visit.  Are they collecting your data and reselling it?  Are you making any money off of your data?

I think we are going to see some sort of reform in this area.  Imagine going to a website and seeing a “ratings” of some kind which shows what they are doing with your data, similar to how the movie world uses different types of ratings (G, PG, PG-13, R, MA).  A little icon or graphic which shows if your data is being sold, transferred, stored, etc.  I think I’d like this – and folks like Apple who take leadership positions with App Stores would have to roll this out next to each app I download.  I’d like to know what’s happening with my data.

Just some food for thought on this Tuesday morning.

YCombinator Ad Innovation Conference Keynote Breakdown

Today’s opening keynote was given by Paul Graham, at the YCombinator Ad Innovation Conference in Mountain View.  I attended along with @tdavidson and @barryl530 to see the early stage innovation that’s happening in the ad tech space.  We were certainly impressed not just with the innovation but with the amount of great agencies in attendance such as AKQA, Goodby, Sapient, Omnicom, Cadreon, VivaKi, and Jess3 amongst others.  We were in good company, to say the least.

Paul admitted he wasn’t an advertising guy, but knows technology enough to understand how tech will influence advertising in the next few years.  The data he used to back his claims were based on the thousands of applications YCombinator receives and is able to forecast and see trends in where innovation is happening.

Here is a summation of the 9 trends that’s pushing advertising, per Paul, but I tend to agree as well.

1. Tablets are important and might call for their own unique advertising platforms to take advantage of the user interface.  Apple and Android will dominate the market and Apple will dictate the ad formats.   Tablets are genuinely a big deal and we aint seen nothing yet.  My take:  Yes, he’s spot on.  Tablets penetrate and are both a content consumption device but increasingly, a content creation device, as long as we can innovate and create good input devices.

2.  All data lives in the cloud. All data about a consumer, transaction, records, etc will live in the cloud and ostensibly, be located in one database that can be used.  What will hold this back will not be technology, but will be government and policy.  My take:  Totally.  We’re seeing this today.  I’m all about data.

3.  More stuff happens peer 2 peer.  Paul used an analogy that I don’t know if I agree with, but he claims that hotels exist because consumers couldn’t find any other way of staying in a remote city or town, so hotels were built to meet this demand.  Now with services like airbnb, hotels could cease to exist as we know them.  My take:  I like what he’s trying to say, but don’t know if I buy the entire analogy.  Not everyone wants to stay in someone else’s home.

4.  There are going to be a lot more startups.   I liked where Paul went with this.  He basically said that engineers had 2 choices after college:  go to graduate school or join a big company.  Now, they have 3.  The third oppty is to create a startup.  Paul threw out the 1% number which was how many developers/engineers start companies… and if this increases 10%, then that’s 10x the amount of startups in the ecosystem.  Again, we aint seen nothing yet with the volume of startups out there… there are going to be many.

5.  Facebook is already a big deal.   Paul said that the $1.6bln from Facebook is quick and simple money and they haven’t really began monetizing yet.  They are focused on growth and even have a Facebook Growth Group, which is one of the most powerful groups in Facebook.  He thinks that when they start monetizing, they can seriously move into markets and kill competitors such as PayPal or Wepay.  My take:  I agree with Paul, but they have to be careful in how they approach this as to not alienate developers and users.  I don’t want Facebook to be 100% of the services I use as a consumer.

6.  Software eating the world.  Don’t be an advertising company that does software.  Be a software company that does ads.  Having this mentality is obviously valley-driven, but allows you to scale a business and think more product focused, which theoretically, should have better outcomes.

7. Target Ads Precisely.  Google could target their ads much more precise but they don’t have to yet, as the market isn’t necessarily requiring it or does it make economic sense for Google to do it until they must.  Paul said a great quote:  “Assume you can read someone’s mind, what ad would you give them.”  My take:  This is one of our investment thesis at kbs+p Ventures – application of data to drive advertising decisioning.

8.  More things will be done by numbers.  If an investor had to place a bet on quantitative measurement/analytics of creative, bets should be placed on measurement.  Numbers will/can/do drive decisioning and with ROI driven world, we need to quantify it.  My take:  Spot on, another investment thesis of kbs+p Ventures as well as what we apply at VMM and The Media Kitchen.  Couldn’t agree more.  I even treat my fantasy football teams this way.. and I want 2-1 this past weekend!

9.  Creative.  Creative will begin to become “generated.”  Paul essentially argued that the best creative in the “future” world will have to be generated because of all the varieties that are needed.  My take:  I think he’s onto something if we’re able to deliver the right creative to the right person at the right time.

I loved Paul’s opening.  This wasn’t 100% of everything, but was a lot of it.  My friend Roger of IA Venturesc also talks about similar trends on his blog, in a post titled, changing polarity in advertising, if you want to continue being inspired…

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An Ad Tech Roll Up

I’ve been noodling the opportunity around an ad tech dream I had.  Yes, I really do dream about these things.

We all know the positions that Yahoo! and AOL are in.  I won’t go into that here, other than they will need to make some short term decisions rather quickly.

As a proactive entrepreneur, what if you could acquire the assets of Right Media (including client contracts) from Yahoo! and Platform-A (whatever is left of it) from AOL, roll them up, put on top of a 2.0 infrastructure such as AppNexus and scale the business?

Pros:

  • Client contracts lead to instant revenue
  • RMX has a name for itself in the industry
  • Could probably get it for fire-sale pricing

Cons:

  • Contacts/clients might not transfer
  • Yahoo! inventory is not guaranteed if moved away from Yahoo!, so that would need to be written into the agreements
  • Implementation of both platforms might be more hassle then they are worth
  • Much of Yahoo! RMX talent has already left, but not all

There is an opportunity here, at least at first glance.  It’s less about the technology and more about the contracts to advertisers.  The hypothesis that the acquisition of these both would lead to a faster time to market and revenue out of the gate.  There are probably quite a few other ad tech companies that you could bundle in here at the same time.  Might be worth investigating?  I’m sure a few people probably are…

The Big Switch: Apple to Android

Yesterday was a big day for me.  I’ve been a loyal iPhone/AT&T user since 2007 but it was time to change.  I didn’t change because the iPhone was bad or I didn’t enjoy it, but I switched to Android/Verizon because I was naturally curious about the entire Android ecosystem and Verizon’s network and my contract with AT&T was up.  I very much enjoyed my iPhone and invested heavily in the surrounding app ecosystem (tons of apps for my kids on it).

Back in December 2010, I wrote a post about wanting to experiment with different Operating Systems.  It took me about 7 months to convince myself, but I finally did it.  I’ve been told by friends that they think I’ll probably go back to the iOS, but I am looking forward to this experiment.  My entire computer infrastructure in my home is Apple-OS, so this will be the first non-native OS in my home.

I ended up getting the Samsung Charge, because I was growing impatient not knowing when the Galaxy S2 would come out; should the Galaxy SII perform better, I can always switch.

The first 18 hours with the phone have been great. It’s actually been a lot easier to setup than I thought it would be and Android is very much intuitive.  I’d say that the Android system allows the user to have a lot more control.  A good parallel here is manual vs. automatic cars.  The Apple iOS is very much an automatic transmission, it (just) works. The Android OS is a manual (stick) transmission that isn’t necessary, but allows for much more tweaking.

I’ve been pleasantly surprised with the Android Marketplace.  There hasn’t been an app yet that I cannot find and love how Android allows for multiple apps to be open at the same time (which I suppose is coming in iOS 5).

The phone also has 4G, which is much, much faster than my 3G.

So far, so good.  Looking forward to exploring.

Big Tech vs. Big Advertising – When the Worlds Collide

While much of our days are battling agency against agency for our next client relationship that brings revenue growth, whom we’ve been competing with over the decades is changing.  When David Ogilvy wrote his famous book, I bet he wasn’t envisioning who was going to be his next competitor.  It’s no longer just JWT vs. Ogilvy or kbs+p vs. Arnold.   It’s also Madison Avenue (encompassing many of our agencies) vs. IBM vs. Adobe vs. EMC vs. etc.  You get the idea.

Today’s announcement with Adobe is powerful and did not come out of left field.  Back in March, I blogged about why I’m long on ADBE.

IBM + Adobe + EMC combined have a $266 billion combined market cap.
MDC + Publicis + IPG + WPP + Omnicom have a combined $44.1 billion market cap.

One could certainly argue about multiples and valuation of stocks (tech vs. services) but you get the idea – there is material market cap differentials between the two cohorts.

Over the next decade, as Madison Avenue grows a digital backbone and big tech expands it’s marketing services, our world is going to collide.  I’ve seen both sides in their current form today and there are pockets of brilliance but there is a really long way to go.  I have to assume that the M&A landscape on both sides of the table here are going to be fascinating and corporate development folks are going to be busy.

Note:  It’s not a winner take all game here.  Many partnerships are going to be found between these businesses, however, at what point does cooperation turn into competition?  (I like competition)

Areas of Interest from kbs+p Ventures Summit

We launched kbs+p Ventures about 6 months ago as an early stage investment arm of our agency, kbs+p.  Last Friday, we hosted a summit where we brought a small group of people with both visionary and tactical backgrounds to help us filter the areas that are of potential investment focus.  While most firms keep this confidential, following Fred’s recent post over at AVC, I’ll open these thoughts up as well.

Why?  I hope that any of you reading this blog might help point me/us in the right direction of entrepreneurs who are innovating in any one of these spaces.  You can easily get in touch with me here or on Twitter or LinkedIn.

In no particular order:

1.  Virtual Currency – what will the impact be of Facebook Credits?

2.  Measurement – how do you measure engagement?  How do you value “social”?

3.  Fan Acquisition – what are the best ways to acquire “fans” and “followers”?

4.  In-Stream – should brands participate in the stream of conversation and if they do, what are the rules to play by?  A company who is participating here is 140Proof

5.  Influence – how do you buy influence?

6.  No two networks or channels are used the same way.  I.e. While Facebook is a social channel, so is Linked In.  Think about the differences in your usage.  Compare this to 20 years ago when ABC and NBC, both television stations, were used similarly.

7.  With millions of web publishers, how do you match creative to each individual publisher?  It’s tough.

8.  We spend a lot of time targeting specific audiences, but an additional filter to overlay is “mindset.”  Are they currently in the “mode” to purchase? How do we differentiate messaging based upon where audiences are in the funnel?

9.  How do we combine SEM + social media monitoring.  If a topic is trending, how do we buy SEM against it?

10.  Predictive Trending – how do we predict what might trend and then purchase advertising around it.  (current company doing this is buzzfeed)

11.  How do we create video at low-cost, and then scale the distribution

12.  There currently isn’t one cohesive “stream” of me.  How can we harness the entire stream?  Where will the meta-stream live?

Leave comments and/or questions.  Would love to elaborate on any or all of these.

Of Acceleration, Inspiration Spaces, and Funds: 2011 TMK Digital Media VC Conference

One of the areas that I focus on is bridging Madison Avenue with Silicon Alley/Valley.  I think it’s unbelievably important for the future growth of both ecosystems.

At The Media Kitchen, in 2008, we launched our first Digital Media Venture Capital Conference.  We haven’t looked back since and we’re going on our 4th year of doing this.  We’ve had venture firms such as Union Square Ventures, First Round Capital, DFJ Gotham, Spark Capital, Betaworks (not a full VC firm), and IA Ventures present in the past with a wealth of CEOs and founders from amazing startups including but not limited to Meetup, 33 Across, AppNexus, Pinch Media, Izea, ContextWeb, DoubleVerify, Boxee, 5Min, TargetSpot, ChartBeat, Bit.ly, Zenetics, Metamarkets, FourSquare, GetGlue, Tumblr, and Twitter.  Here’s a link to my post from our 2008 conference.

This year, we’re changing it up a bit and not focusing 100% on Venture Capital funds, but around the ecosystem that surrounds entrepreneurship.  I think this is very important to present because the more people that we inspire about the surrounding ecosystem of entrepreneurship, the more people will feel comfortable with the possibilities of innovation.

We’re holding our TMK Digital Media Venture Capital Conference entitled, Accelerators, Inspiration Spaces, and Startups on May 17, 2011 here in New York City.  I have the ability to give 5 lucky readers of this post admission to the event which will be from 8;15am-12:30pm.  It’ll be an intimate group  of <150 awesome people.

If you are interested in attending and want to come, please reach out using this form with 1-2 sentences of why.  I’d love to give the right people the opportunity to be here to mingle with our entire agency, our clients, and our friends from the entrepreneurial world.

Long Adobe (Nasdaq: ADBE)

I’m going to buy my 2 kids, David and Ava, some Adobe stock.

I figured I’d start this post with a bold statement.  Hopefully I got your attention.

Adobe is upping their game.  They historically have been a software company focused on the creative & production industry.  They could have stayed this way and built a nice business for the future.  But, someone there is leading a charge and they IMHO are spot on with where they need to go.

Adobe was rumored to have tried to acquire Invite Media in 2010.
Adobe acquired Demdex, a data management platform.
Adobe just partnered with MediaLets for mobile rich media serving.
Adobe is rumored to be now flirting with Triggit.

Adobe, while historically never spoke to agency media teams, are now building a media foundation for the future.  While being able to tie creative into metrics, analytics & media delivery, they are able to get to the future state of marketing we all talk about.

Some other companies I’m liking due to their recent acquisitions and intentions:  IBM, GSI Commerce, Marketshare Partners

Note:  All of this is predicated on whether or not Adobe or any of the above companies can deliver on the potential that each acquisition or partnership brings to the table.  We’ve all seen how acquisitions don’t work, but in theory, I like all the above.