CMGT 534

Introduction to Online Communities

Clearstone Venture Partners – Intro to Online Communities

Clearstone Venture Partners – Intro to Online Communities

Today we met one of my favorite speakers to date, William Quigley, Managing Partner of Clearstone Venture Partners.  Quigley concentrates on its Internet and communications related investments, and gave our class a priceless education about how VC’s work, the stages involved in building a startup, how to select an industry to invest in, and how to pitch our companies to a VC.

Clearstone borrows ¾ of a billion dollars from large corporate investors to invest, and Clearstone gets to keep 25% of the profits. Quigley’s investment strategy is to invest in cold sectors because even if you have a great company, competition is what erodes profit margins; you want to be in the hot space two years before it’s hot.

He recommends using a VC because it’s really hard to go public or get acquired if there was no VC on board throughout a company’s growth to clean it up. The companies Clearstone incubates have always done much better than the people who just ask for money. A startup should always think about who would be a natural acquirer of this business; and think of others besides the usual suspects, Google, Microsoft and Yahoo. Companies tend to get acquired if they specialize greatly in one thing, especially if the firm does a lot of R&D, which big firms buy from startups with increasing frequency. Play in large markets because they’re very forgiving, and don’t depend on advertising revenue.

There is no shortage of money for good ideas, and you’ll need $10-100 million to build a successful company. No idea is too big to fun. For example, a WiMax business plan earned an entrepreneur $900 million of VC funding before a company was even formed! The downside to taking money from a VC is that they take control of your company. That’s not the end of the world though because the founder retains 50% ownership, no matter how much the VC puts in. That means an entrepreneur should shoot for as big an investment as possible. The pace at which you can raise capital will decide whether you’re the best in the biz or a lagger because there are always 10 other people right by you with the same idea.

The most valuable knowledge imparted on us is what a VC is looking for in a proposal, something all entrepreneurs want to know. First get their attention with a teaser PowerPoint presentation, and it’s a bonus if you already have a product or some customers. If you’re seeking less than a million dollars, go to an Angel instead of a VC. Guess market sizes and predictions when you have to because it’s a great problem when there’s no info about a market because no one’s capturing its future value yet. The CEO likes taking a modest salary so he can lead the team and say everyone’s bootstrapping together. Raise a lot of money but spend it as if you’ll never see another dime. Project revenues of years 1, 2 and 3. It takes about a month for the VC money to come through, but that’s a lot better than Angel investment time frames, where you’ll have to badger the investor for the check constantly. If one VC doesn’t like the idea, try pitching it to others. One of Quigley’s companies recently went public after getting rejected by 140 VC’s early on.

Quigley wants to believe in an entrepreneur’s vision about how the market will look in 3 years. I was surprised to hear that 75% of presenting to a VC is its entertainment value. My classmate Blake and I joked later that we ought to take up some acting classes before we approach a VC, but we will probably actually do it. The futurist must use 2-3 interesting trends or ideas about market evolution, convince the VC in his ability to recruit great talent, be informed and excited, be a great spokesman for the business, be capable of dealing with setback, and be willing to fight above his weight class. When you advertise yourself as a deep thinking in the space it becomes a self-fulfilling prophecy. Disciplined hard work will get you there: Spend months thinking about an idea, and package it in a way that’s easy to understand; have a really novel take on a new business model; capture the economics of your business in a chart or two. VC’s only want to play with ideas in which the visionary is right and everyone else is wrong.

The most startling fact of the day is that only 1 out of 1,000 pitches actually get funding, but there are many sources of money out there and if you have a great vision, stick it out and make it happen.

Lessons from Founders at Work: Stories of Startups’ Early Days

Lessons from Founders at Work: Stories of Startups’ Early Days

Jessica Livingston’s Founders at Work: Stories of Startups’ Early Days is a first-hand account of the creation of 32 of the world’s most influential tech companies. Each chapter is an interview with a different company’s founder, averaging 14 pages a piece. This gives the reader a lot of freedom to read one story at a time whenever he or she needs a little inspiration – and boy is it inspirational! Much of the time I thought, “That could totally be me!” so I took frequent pauses to blast out ideas into my Website Concepts log. The stories are often laugh-out-loud funny, and will make you wonder how the world could have possibly doubted today’s most useful technologies.

It’s interesting how much the founders have in common. For example they almost all started on a project completely different from what they ended up succeeding with. Many of them were forced to make major life sacrifices to dedicate themselves to a concept with no funding or revenue. Almost every story includes a paragraph about the time the founder had stayed awake for 4 days straight, working tirelessly on the product before launch. And rarely were their ideas embraced with open arms; instead investors, coworkers, friends, and competitors balked at them. As computing pioneer Howard Aiken once said, “Don’t worry about people stealing your ideas. If your ideas are any good, you’ll have to ram them down people’s throats.”

All of the founders convey great lessons learned in entrepreneurship. I will focus on a few of my favorite stories and some of the most valuable advice I picked up from their great achievements. However, I highly recommend reading it for yourself, as I consider this book highly inspirational. I will definitely flip back to one of these stories when I need a little encouragement in my own startup in the future.

Like many of the founders, PayPal’s Max Levchin is clearly a brilliant programmer and engineer, which makes it a little hard for me to relate at times. But he’s also a great entrepreneur, with valuable insight into startup success recipes. PayPal had changed its business plan six times before getting it right, which is fine because a good entrepreneur is not tied to any one specific plan. He also welcomes the challenge of being a novice in a field of experts because rather than conforming to the norm, you’re inspired to invent something. For example, Citibank competed with PayPal but, adhering to the banking norm, held tight restrictions over which users and transactions it would service in order to prevent fraud. PayPal let everyone use the system because “new users learning about a new system really don’t want to be restricted.” Instead PayPal became “a security company pretending to be a financial services company.” It judges the risk of a transaction to help it decide whether to block it or take it on. He attributes its tremendous growth rate to the world’s most powerful viral driver: money waiting for you when you sign up. Some sellers refused to accept PayPal but a buyer could still send them money through it. The seller receives an email informing him that money awaits him and naturally he registers an account. Finally, Levchin attributes his success to having a great cofounder, warning that it’s very hard to start a company completely alone.

Evan Williams founded Pyra Labs, which created Blogger.com. Initially it was a web-based project management tool for intranets, which he likens to today’s Basecamp. One of the products called Stuff enabled quick, disorganized sharing within the company. While the Pyra team considered it very useful to them, they thought it was too simple and trivial to be the product in and of itself. While there were other blogs on the internet, they weren’t taken seriously for a long time. At one point after releasing Blogger.com to the public, Pyra ran out of money and everyone except Williams quit or got laid off. This prompted the Server Fund Drive, in which Blogger’s website requested donations to keep the website live. Surprisingly $17,000 came in and saved the company. During 2001 Williams considered quitting many times but remained “hallucinogenically optimistic,” his most valuable advice. Don’t let people talk you out of your gut feelings or force you to compromise on your ideas. “If everyone agrees, it’s probably because you’re not doing anything original.” He also warns an entrepreneur to roll with the punches, because if things don’t go according to plan, you never know whether it’s good or bad until later, if ever. Deals that didn’t work out were a bummer at the time but turned out to be very lucky. Williams concludes that it’s amazing how far you can go with a simple idea.

Tim Brady was the 3rd employee at Yahoo, after the two cofounders. He left Harvard Business School in his last semester to join Yahoo, not knowing whether they would graduate him. Originally Jerry and Dave used Yahoo to keep track of the technical papers they used in doing their PhD theses. All major EE graduate programs found out about it and send them emails asking them to add papers to the list. Suddenly they went from doing their graduate work to adding websites to their list for 8 hours a day for 8 months, and traffic grew exponentially, so they called Brady asking for help. They were offered money by the LA Times, AOL & Microsoft early on but decided to do it themselves because they had so much confidence in what they were doing. Concerning competition, Brady reflects, “Although we thought it was crazy, AOL’s walled garden was bigger than the Internet for a handful of months there, which made our strategy impossible. That was definitely a threat” Employees experienced 16- to 18-hour work days but the group of people was great so the hours were never dreaded. An embarrassing reflection was when the Yahoo team met the Hotmail founders for lunch and rejected the idea, unable to see how it could get big. Brady argues that doing business with friends was a good idea in his case, in spite of the common contradictory words of caution.

Paul Buchheit was the 23rd employee at Google. He started companies within Google and enjoyed the benefits and minimal risk as opposed to starting them by himself. For example, he was able to learn from successful techniques in other divisions, brainstorm with very smart people around him, access expensive infrastructure for free, and receive a warm welcoming to his “crazy ideas.” He brags that he built the first version of Gmail in a single day and, by the way, also built AdSense in less than a day. One reflection involves Buchheit pulling a malfunctioning hard drive from a PC and transplanting the electronics from another drive to salvage the data. Like many other founders interviewed, he stayed up for 3 days straight prior to launch, furiously assembling and testing; and he considered normal working hours noon until 3:00 am. It’s interesting that he doesn’t know whether he would have earned any less money if he had not created Gmail and AdSense, but I get the impression he’s earned enough not to be concerned. Buchheit recalls that he left Intel for a little startup not knowing whether it would succeed because he considered it a learning experience, admitting, “Honestly, I was pretty sure AltaVista was going to destroy Google.”

How to Enable Facebook Connect on a WordPress Blog

How to Enable Facebook Connect on a WordPress Blog

Do you ever find yourself excited to respond to a news or blog post, but dread the registration process? I often begin the process and then leave the site when I discover how much info it wants from me, or when I remember that I’ll have to verify my email address and log in after I fill out 10 forms of ID.

Facebook Connect solves this problem. With it I can log in to more than 80,000 websites simply using my Facebook login credentials. It’s safe, fast and very easy to use, and apparently I’m not the only one who thinks so. More than 60 million Facebook users engage with Facebook Connect on external websites every month. According to Facebook’s Developers Wiki, you can expect a 30-200% increase in user registrations after enabling Facebook Connect, and see a 15-100% increase in reviews and other user generated content. The web developer can set up Facebook Connect to prompt a user to cross-post his comment on Facebook after posting to the site, encouraging viral activity. Business Insider speculates that for each story published in Facebook, a site can expect an average of 3 clicks back to the site. The website also gains access to more user demographics, and it can provide a personalized experience by pulling users’ profile pictures and other data to the front end.

Knowing its many benefits, I had to set up Facebook Connect on my own blog. The setup is a little advanced but I figured I’d write a guide to help my fellow APOC students set it up on their blog. The procedure varies depending on your platform but my guide will assume that you’re hosting a WordPress 2.9.2 install through GoDaddy.

First, make sure your server is configured to run PHP5 rather than PHP4.

  • If you can access your server files via FTP, open “.htaccess” under the root directory with Notepad. If you see “AddHandler application/x-httpd-php5 .php” and nothing referring to php4, skip to the next paragraph. Otherwise follow next bullet point.
  • Log in to GoDaddy Hosting Control Center, and see “PHP Version” under Account Summary. If it already reads PHP 5.x, skip to the next paragraph. If it says PHP 4.x, click on Content, then Add-On Languages. Next to PHP Version, select PHP 5.x, click Continue, and confirm the warning. Click update. Then navigate to Settings > File Extension. If the change to 5.x has been completed, you’ll see at the bottom of the available extensions list, “Extension -> .php | Runs Under -> PHP 5.x” If it’s not there, stop here and come back in an hour or so, and when it is there, you’re ready to proceed. Thanks to ardamis for some of this info.

Log in to your blog’s Admin Dashboard. Click Plugins in the left navigation panel, and click Add New near the top. Search for “WP-FacebookConnect,” and make sure you install the one by Adam Hupp (who works for Facebook and quickly responds to emails, to my pleasant surprise). Install and Activate plugin.

Register a new Facebook application here: http://www.facebook.com/developers/createapp.php?version=new. In your blog’s Admin Dashboard, navigate to Settings > Facebook Connect, and copy your Facebook application’s API Key and Secret into the proper fields and Update Options.

To test whether everything works, log out of your blog, attempt to comment on a post, connect with Facebook Connect and post a comment on your own story. Allow Facebook to publish the comment “story” to your Facebook wall, and then check your Facebook wall to make sure the comment published everywhere it’s supposed to.  Configure more Application settings here: http://www.facebook.com/developers/apps.php.

Charles Porch from Ning – Intro to Online Communities

Charles Porch from Ning – Intro to Online Communities

Ning Strategic Relationships Manager, Charles Porch, spoke to the class today (2/8/2010). I’d never heard of Ning before so I was surprised to discover this social networking platform with 42 million users. It’s a web service that allows anyone to build a social networking with sections for videos, photos, chat, music, groups, events, forums, and blogs. Members of the network can do just about anything they can do on Facebook but they’re within the confines of your own social network. In 6 Ways to Use Ning for Business, Mashable describes how business owners can use Ning to quickly and easily collect feedback, facilitate discussions, present content & media, inspire customers like Martha Stewart, participate in existing communities like Travel Blog Exchange, and engage your evangelists.

Charles describes Ning as a place where users can meet people with similar interests who you don’t already know. It contains searchable web pages that will last and create a community around them. He offered some general advice on website development and what to avoid: slow loading pages, abuse of Flash, and clutter. Instead, tell people why they’re there and have a hook. 50 Cent for example has one of the most popular Ning networks because his is about hip-hop news rather than just a fan page.

Roger Jackson gave us some website design tips, advising us to design for the lowest common denominator, generally an 80 year-old grandma. Liz Burr graduated from APOC in ’06 and now works for herself as a new media consultant. She spends her time advising which platform to use for a website concept. Eddie North-Hagar graduated from APOC in ’09 and co-founded Citilista, which networks separate aspects of a local community into a neighborhood hub, enabling conversation between residents.

Heath Row from Google – Intro to Online Communities

Heath Row from Google – Intro to Online Communities

Today (2/1/2010) we met Micki Krimmel, founder of NeighborGoods.net. I created a profile at the website and was immediately impressed by the professional design, Google Maps API integration and the overall utility of the site. Right now I’m trying to pick up a free bean bag chair I found listed near my home. Micki acts as the Community Manager (CM) at NeighborGoods and offered some advice for the class. She has done consulting for many companies and the most common pitfall she discovered is that the CM doesn’t hold enough power in the firm. The CM is very important and needs to advocate for the users and have the authority to make big changes when necessary. They should always use their real names, which I noticed Micki does on her own site. Her model is to serve the community rather than just moderate them; she even goes so far as to call the users on the phone to ask how to improve. I would be shocked if a CM called me to discuss one of my posts – but flattered and empowered at the same time.

Heath Row is a Research Manager at Google. His general insight into online communities is that they police themselves if the users have a strong connection to one another, like within a circle of friends on Facebook. A community is fragile when the core group of users don’t know each other. He also emphasizes the significance of consistent community managers. People get upset or stop participating when the CM changes, and this fact contributed to Squidoo’s growth struggles.

Alex Asselin just graduated from APOC last year. She’s now a CM at NBC and manages EchoParkOnline. She advised us on keeping community moderators happy. She says they often work 60+ hours a week for free, just for recognition or the love of the community. The owner ought to provide cool stuff to unpaid admins who have assisted the most, so they feel like part of the management rather than a competitor with other members. I can certainly relate, as I got promoted to an OP in a few hubs on the Direct Connect network and found myself representing the hubs and helping members considerably more than before I achieved the elevated status.

Erika Shen moved from managing a CBS.com community to product development at Disney.com. She works to resolve struggles unique to Disney, including cleaning up the users’ “dirty chatter,” empowering moderators to advocate for the users to management, and balancing the demands of company execs with the reality of the self-engendered community.

Today’s speakers agreed that CMs should always admit their affiliation with the company, and gently nudge conversations to the direction you want them to go, working with them along the way. In order to scale, a website should empower users to answer one another in order to minimize employee time spent answering questions. In order to survive in the new media world, old school companies need to let relax their outbound communication model and allow themselves to learn from users to better serve them.

CouchSurfing.org Host Experience

CouchSurfing.org Host Experience

CouchSurfing is an international non-profit organization that has been connecting travelers with locals since 2004. Since then over a million people have met through the site, to share hospitality and cultural understanding.

The benefits of using the site are obvious for the “surfers,” or travelers. They get to stay for free while they travel and save a bundle of money they would have spent on hotels, probably more than $100 a night. They also get to experience much more of the local environment than your average tourist because the hosts show them the best attractions and nightlife. And the hosts usually have local friends who also help immerse the traveler in “the real Hollywood,” or whatever city they’re in.

The hosts’ benefits are a little harder to explain, so I’ll start with the obvious downsides. Most people would not want to be a host because it could put your home and personal safety at risk; after all, hosts usually let surfers into their home who they’ve never met in person. It is an inconvenience having a guest sleep over because you have to worry about door locking schedules, kitchen and common area messes, and quiet hours. The traveler has to use your shower and sometimes even eat your food. On top of all this the surfer doesn’t pay you a dime for your troubles.

Hosting, however, has been a rewarding experience for me. I love to host my local friends after a night of clubbing in Hollywood because I live within walking distance of the clubs, and I think I make a great host. I can’t explain why, but I feel great when I help my friends have a great night, make sure they’re fed and hydrated, and give them a safe and free place to crash. I don’t expect anything in return and don’t really receive anything in return.

Hosting travelers gives me a similar feeling. I know I’m helping the travelers maximize enjoyment and minimize expense, allowing them to travel longer and experience more than they would without my help. I also get to experience some culture they bring with them, view the same old Hollywood from the awe-struck eyes of the traveler, and, in my most recent experience, receive a fancy bottle of Scotch straight from the distillery.

Even to myself I find it difficult to explain my motivation for jeopardizing my property and safety on behalf of a stranger, but I find company in a quote by Adam Smith’s book, The Theory of Moral Sentiments: “How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it, except the pleasure of seeing it.”

From January 22nd through the 24th, I had the pleasure of hosting Kim de Jong of Amsterdam. She has been a host before and had great reviews so I figured I could trust her in my home. She was traveling alone which made me feel a little more in control of the situation and less afraid for my property and safety. And just like on any review website, CS members don’t want to wreck their track record of positive reviews by doing something shady, so after a few email exchanges I figured I could trust her.

Kim flew from Europe to LAX and cabbed it to my apartment. Even after being up for more than 35 hours straight she had the energy to go clubbing with my friends and me on Friday night. We hit up My House and H.Wood with 4 of my friends, skipping lines and getting in free, saving us a combined $240 between the two clubs. She did return the favor by buying a couple rounds of drinks which are as much as $18 a piece.

Kim spent Saturday exploring Hollywood Blvd by herself, an easy walk from my apartment. Then Saturday night I introduced her to nine of my friends and we had a great time skipping the line and buying a table at Mi-6. None of us had been there before and we were all very impressed and had a great time.

Kim headed out Monday morning for San Diego and is still traveling in California today, almost a month later. We exchanged positive reviews on CS, which makes us both likely to get more activity on the site in the future. I learned as much as I could about life in Amsterdam and the differences in government and culture. Kim works as a Financial Analyst for a well known tech manufacturer, which, for some reason, allows her to travel a lot. In fact she has 24 countries listed in the Locations Traveled section on her CS profile.

I thoroughly enjoyed my experience and look forward to hosting travelers again in the near future. I also hope my positive reviews will earn me some credibility for the time I decide to travel and take advantage of CS host hospitality. I recommend making an account and exploring the site; and if you have it in you, I recommend hosting a traveler yourself.

http://www.couchsurfing.org/register.html

Google Docs vs. Traditional Organization 1/20/2010

Google Docs vs. Traditional Organization 1/20/2010

Google Docs is my favorite and most used web app. I have 68 documents under just one of my Google accounts. I use them to keep track of debts between my housemate and me, my internet login credentials at 32 different sites, everything needed to maintain my 42 domains and hosting accounts, prospective band members to try out, entrepreneurship ideas, a couple of to-do lists, comparison shopping for furniture and other interesting stuff on Craigslist and eBay, potential job leads, real estate clients’ tenant ledgers, earnings and payments collected as an independent contractor for tax filing and invoicing, and a lot of other things.

In the past I collected lists such as these in far less efficient ways. I organized credits and debts between housemates on paper, whose data I could not reorganize and which I frequently could not locate when needed. I kept my internet credentials stored in an Excel file on my home PC so I was powerless and anonymous on the internet when I was away from home. And I had to save receipts and keep paper trails when invoicing clients, tracking tax deductions and receiving business payments.

Spreadsheet and document organization is enough of a reason to abandon my old methods but another revolutionary advancement is my ability to collaborate. My housemate can add debts to the same Debt Log when I owe him money and we can both view and edit the document simultaneously, which allows us to see exactly what’s owed without worrying about any revisions we haven’t seen yet. My bandmates add prospects to the list when they find a new musician and we can all see our progress in real time, which motivates us all to put in work ourselves. And my real estate clients can update themselves on when and how much their tenants have paid, which saves me a lot of phone calls and headaches.

Google Docs is an all-in-one solution to my paperwork organization struggles and many other issues I never would have known existed before I used it. Because it updates on the fly I never have to worry about losing my work in a power outage or computer crash. Because of its live collaboration feature and flexible permissions settings I know that my intended collaborators and I always have secure access to perfectly current data. Because of its Microsoft Office similarity and compatibility the apps are completely intuitive and make it easy to migrate data across platforms. Because the processing power and data storage is remote I don’t have to worry about my system specs and stability. And like all well designed websites I get a consistent usability experience in spite of varying hardware, operating systems and browsers.

I do many things to organize my life now that I would have never considered doing before Google Apps made it possible. I consider it an invaluable resource and I always try to help my friends, colleagues and clients learn to make Google Apps work for them like I have.

Welcome to my tech blog, Jesse.LA!

Welcome to my tech blog, Jesse.LA!

Hello and welcome to my blog. I’m Jesse Wilson and I’m enrolled in the University of Southern California’s Annenberg Program on Online Communities seeking a Master’s in Communication Management.

I just registered jesse.la to be my new tech blog and use for my class, CMGT 534 – Introduction to Online Communities.

Dot-LA domains were originally intended as the top level domain (TLD) for Laos, but its official registry site now claims, “Los Angeles is the world’s first city to be awarded its own unique internet address: .LA”

The advantage to a Dot-LA name is that they’re still widely available and hyperlocal. If you want to register a dot-LA domain, I recommend using 000domains.com with coupon code “confirm10″ to get the price down to $31.49 a year, excluding hosting.

Then I installed Google Apps which allows me to use a Gmail webmail interface and many other Google services under my own jesse.la identity. And now I’m using Blogger to administer the site’s content, though I might later install my own CMS such as WordPress, PHPNuke, Joomla or Drupal, all of which I’ve experimented with in the past.

Thanks for your visit and I look forward to educating my readers on CMGT 534 and the world of online communities and tech news.