eBay’s Squandered Trust
Last week, I met with one startup trying to solve "online trust" issues in the social sphere, and wrote about another one dealing with trust in commerce (both online and offline).
I guess for some, trust and reputation seem like an unsolved problem. But shouldn't this have been solved already?
I think it should have... by eBay, a long time ago.
Almost all of us have bought or sold something on eBay before, and when we did, we all cared about the reputation of both ourselves and the other party.
eBay was early to figure this part of the trust out: online buyers and sellers don't have another way of contextualizing the other person in a transaction, so reputation adds a confidence premium to the sale.
Realizing this early helped eBay win the auctions game and then move on to "store" models, taking a lot of online retail with it.
What eBay failed to see, however, is how this identity data could have been used elsewhere, outside the world of second-hand hand-bags, collector's items, and cheap electronics. And so, other players started chipping slowly away.
Want to know if that business person is a schmuck? I bet eBay could have told you, but LinkedIn stepped in and took over the Professional Reputation space.
Want to know how that local retail store treats its customers? I bet eBay could have told you, but Yelp stepped in and took over the Local Business Reputation space.
And that's just on the seller side!
Millions more people buy goods on eBay than sell on eBay, and buyer reputation data has much larger implications!
As I've applied for apartments and credit cards over the years, I would have LOVED to show off my eBay score, as a way to build trust between myself and a business, in order to lower my rates or get a better deal.
And remember that time I -- achem -- went on an online dating site? Why wouldn't I have told people that I was an "A++++++ Buyer" with an eBay score of over 25.
=======
As startups like Venmo keep reminding me, trust and confidence are pilars of any economy, and The Connected Economy -- every economy powered by the Internet -- is no different.
Obviously, hindsight is 20/20; but it's just so hard for me to understand how eBay could have let their pioneering trust and reputation work go unused. We know they knew how powerful eBay scores and feedback were! Was there no imagination or dreams for something bigger?
I guess not.
Luckily, eBay's no longer a startup, so I don't have to root for them anymore. It's sad to call out a company I used to admire, but I'm glad I work in this innovation industry, so I can watch my friends and colleagues make things right.
Today, I root for the startups hustling their way into the void left by this Internet pioneer.
Venmo: The Future of Payments
Over the past few months, I've been using the private beta of Venmo, a new, flexible payments platform built by my friend Andrew Kortina and his friend Iqram Magdon-Ismail.
On the surface, Venmo has some similarities to PayPal and a few other payments systems, in that you can text "pay so-and-so $10 for whatever" and, if that person is on the service, they get a message to approve the payment. If they're not, an invite to join is sent.
Boring? Not so fast.
Where Venmo shines is in the trusted network you build up. Andrew and Iqram realized something insanely important, that other payment sites (and social-networks) have failed to realize, and can't really implement: that many of us have friends and contacts we'd trust enough to take money right out of our wallet!
With that realization, Venmo also has a "Trusted Friend" feature, in which I can mark my roommate, girlfriend, and brother as "Trusted" friends, allowing them to "charge innonate $14 for dinner" without having to get me involved!
This feature is already proving immensely valuable, taking 50% of the hassle of mobile payments right out of the equation. Whereas before you had to ask to be paid and then have that payment approved, transferring money among friends becomes super simple.
Of course where this will get super interesting is when restaurants and other venues get into the mix. Andrew and I had lunch today at Simple Kitchen in Chelsea, where both of us eat several times a week (I'm currently the Mayor on Foursquare, for what it's worth). After the 10th time eating at Simple Kitchen (a few months ago) I started building a rapport with the locale and its employees to the point in which I'd say I "trust" them.
So, how great would it be if Simple Kitchen, along with other places I like and trust, could automatically charge me for everything I eat there? "Accounts" used to be things for Country Clubs -- a service provided to make the most elite customers feel appreciated. Well, combine Venmo with our personal relationships with people and places and we can all feel like elite customers.
And that's good for business.
These are early days for Venmo. But they're moving a mile a minute and I've already gotten 10 invites from friends today, so the growth curve has got to be exciting for them (by the way, I have 6 invites to give out, so comment below if you want one).
I'm looking forward to using Venmo more and seeing where they take the product.
Good luck, fellas!
Net Neutrality Debate Comes to NYC
Over the next weeks and month, the Net Neutrality debate will be heating up in Washington. It will also be heating up in NYC.
Next week, Jason Schwartz organized an impressive Oxford-style debate between the leading sides of the Net Neutrality debate. Anyone working in the Internet, Media, political or other industry should attend.
Here's the info:
When: Tuesday, November 17, 2009 from 7:00 PM - 9:30 PM (ET)
Where: IAC Building, 555 W 18th St, btw 10th ave and the Westside Highway
RSVP: Here
Also, next month, come to the December NY Tech Meetup, where -- on top of our tech demos -- Josh Silver will be speaking about the Net Neutrality debate.
Why Google Should Buy Brightcove?
For obvious reasons, I've kept an eye on how YouTube has partnered with rights holders over the last few months and years. There have been several deals recently which have really caught my eye, but one rumored deal, unrelated to rights, really got the blogger in me thinking.
Earlier this month, it was rumored that Google was in talks to buy Brightcove -- the once "we-do-it-all" video platform, now forced (by YouTube) cut back and specialize in a a video asset management solution and cheap(er) CDN bandwidth for publishers.
I didn't really get the rumored deal at first -- I thought a premium, video asset management solution was the sort of unscalable, sales-heavy business Google would try to avoid -- but Peter Kafka's recent report on the YouTube/Warner Music Group deal re-openned the issue for me.
In his report, Peter notes:
Unlike Vevo, Warner and YouTube won’t be creating a separate site for Warner videos, and Warner won’t be creating a separate company dedicated to its videos. Instead, YouTube will help Warner create a “premium advertising platform” for its videos within YouTube.
Immediately upon reading this I thought back to Brightcove. A backend solution for Warner, while not rocket-science, would be rather distracting for the main YouTube team, and outside the expertise of Google's AdWords/Sense teams, which are more focused on direct-to-advertiser/publisher solutions -- not something built for a sales force.
For the YouTube/Warner deal to work, however, YouTube needs a solution Warner can stick a sales force on, and they need to do it fast.
I know I'm adding speculation to speculation, but I wonder if Brightcove would make a good solution for Google in that role. Sure the $80 million a year in revenue would be good for YouTube's unit, and it could further solidify YouTube in the online video market, but what if -- at the end of the day -- it was just a really good ad management solution.
I don't know the answer. Do you?
Twitter Payments: No Better Time Than Now
Twitter, now is that time to build that payments system into your platform.
Over a year ago, I wrote my most-read article ever, detailing how a payments system in Twitter would create a tremendous amount of value and revenue for the startup. While I heard from company insiders that the proposition was considered at a high level, their focus on premium features for businesses and getting more high profile users to actively use the service indicates that any payments system currently sits on the back burner.
In my mind here's why now is the time to bring payments to the front burner, and why soon may be too late:
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People still use Twitter like the command-line.
Take advantage of this!! As I detailed in my post last year, Twitter has a leg-up in the mobile payments space specifically because it's users are already comfortable using odd syntax in their messaging. As I pointed out then, while most of us have a PayPal account none of us know the syntax to send mobile payments with it. Twitter users understand what an "@" and a "d" do within days of using the service. In this regard, Twitter is the MySpace (where my little siblings "learned" CSS and HTML) of the command-line; and mobile payments, because mobile is a multi-platform world, requires command-line-like interfaces.
This being said, mobile is converging. More and more applications are cross-platform and more and more people have phones which run applications. Twitter's leg-up in mobile could evaporate in the next few years. Don't think for a second that PayPal has given up on this space.
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TipJoy shutting down delivers the two best people to implement the service to their doorstep.
(When I wrote the first draft of this post, news hadn't leaked that Ivan was hired by Facebook).
Abby, the co-founder of TipJoy, is now the best person in the world to hire if you want to take on P2P and mobile payments. Fresh out of her TipJoy experience, Twitter would be wise to either hire her or work closely with her while her experience is still fresh.
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Twitter is the only one who can do it on Twitter.
Twitter prides itself on being a "platform." "Let developers add value," they cry. Not in this case. Forget owning P2P payments, if Twitter even wants payments to ever exist in a meaningful way on their platform, they can be the only ones who do it.
I explained this in my post last year and TipJoy confirmed in their postmortem, saying, "We believe that a payments system directly and officially integrated into social networks such as Twitter and Facebook will be a huge success." Abby, Ivan and I aren't the only ones who believe this, by the way. Facebook's hiring of Ivan says they're serious about payments being a part of their platform.
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Social/mobile payments innovation will happen.
Many chalk mobile/social payments up to blabber from trend speculators like yours truly. After all, folks have been talking about it for a long time.
What's missed, however, is that while tools around the trading of money of money in mobile and social spheres has lagged, tools and services where virtual goods are traded have flourished -- because they've focused on getting the tools right.
Twitter can still get this right. But the time to focus on payments is now.
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Pay Option
If you own the rights to premium content, someone is going to make money off it online. It's up to you to make sure you're the one getting paid.
Last night I finally caught up on Season 2 of True Blood. I had watched Season 1 via good old fashioned Netflix DVDs, but since the most recent season's episodes aren't on Netflix, iTunes, or available on HBO's website, I had relied on visits to my girlfriend's house to get caught up on this season, via her cable TV's "on demand."
But here I was at my home this weekend: No HBO on demand (not even cable, actually) and a need to watch the remaining four episodes. All I had was an Internet connection and a deep desire to watch this "premium" content.
In the end, I watched all the episodes I needed to, and very happily paid $10 to do so. However, the episodes I watched weren't legally licensed, and the $10 I paid will never make its way back to HBO, the producers of True Blood, its actors, writers, make-up artists or anyone else who worked tirelessly on creating some wonderful and gripping TV.
No, last night I paid $10 to MegaVideo.com, a YouTube-like site where anyone can upload content, not restricted by length, and share it with the world.
MegaVideo, for its efforts, charges its users $10 a month for unlimited streaming of content on its site (first 75 minutes a day are free, which is fine if you're not watching multiple shows like I was).
And how does MegaVideo get away with this? In short: legal adherence to DMCA laws mixed with a community of uploaders and hyperlinkers colluding to help everyone (including the viewer) get away with it.
Here's how it works: When an episode of True Blood is uploaded to MegaVideo it usually comes with very little metadata which is searchable on the site itself, so it's tough to catch content pirates at upload; but, TV link bloggers, like WatchTrueBlood.com, "somehow" come across links to the now uploaded content and curate pages of links to the episode. Often they have to post dozens of links, as episodes are frequently taken down precisely due to DMCA claims.
So there you are. As often foretold, where there is a will, there is a way. And there is a will to see premium content on the web -- a will which brought someone to upload the four episodes I was looking for, a will for someone to then link to them, and a will for me to pay $10 to view them all.
Where there was no will -- or not enough of it -- was on the part of the original rights holders of the content, who had the opportunity to make the content available to me legally, and for money, but either chose not to or (less likely) couldn't muster the business force to pull it off.
Whether with TV shows or movie clips, legal, revenue-generating markets for content needs to thrive. Hulu is thriving with a lot of broadcast TV's premium content; Blip.tv is thriving with most of the world's independent content creators' shows; and Netflix is thriving making a market for an increasing, yet still limited amount of Hollywood's movies.
One of our goals at AnyClip is to bring this same level of justice to the movie clip market, where it's already demonstrated there's a will among consumers to upload and view movie clips as an astounding rate. Now we're trying to create a way to make that a better experience, while helping the rights holders get paid.
Web Scatter
Over time, everything finds its place; and on the Web, this law is no different. Ashes to ashes, dust to dust.
I made this argument a few years ago regarding organization of offline activity and webservices in a post called "Scatter Mob." This idea actually came out of a comment I wrote on Jeremy Wagstaff's blog where I started to think about a phenomenon I've been calling "Ambiance Scatter."
Ambiance Scatter
Here's what I wrote about Ambiance Scatter in 2007 on Wagstaff's blog:
What I'm seeing with Twitter, IM, email, blogging, etc, etc is something I'm calling "Ambiance Scatter" -- kinda taking Leisa Reichelt's concept of "Ambient Intimacy" and wondering how its different levels intimacy find the most appropriate medium for broadcast.
What I noticed is that with the advent of Twitter, a B-list tech blogger friend of mine -- a great writer -- stopped blogging about personal, uninteresting to the wider-audience stuff on his blog, and instead left the "I love salad at Joe's cafe" stuff for Twitter posts.
While this was written during the very early days of Twitter, I wouldn't change much about this initial observation: with each type of communication, there seems to be an appropriate medium through which to communicate.
Late for a meeting? SMS or DM (direct message). Planning a party? Send an invite through a social network. Announcing something to your company? Email it. Tell someone you miss them? Call them. Need to disperse a rumor? Blog about it. Tell your friends you're at the bar? Foursquare it.
100 years ago all this would have happened via the postal service. Then we got telephones. Fax was the next step, and then we had email. 10 years ago, most everything on my list above would have gone via email. But Moore's Law must be at play here too.
As we find new ways to communicate, more and more appropriate media pop up; conversely, as we create new media, people find more and more ways to communicate (for many, Foursquare has replaced the flashmob communication I identified as popular on Twitter in Scatter Mob).
Again, for every type of communication there is a most appropriate medium.
This so this the Web of communication: a constantly and increasingly fragmenting and coalescing stream of messages, each finding their most appropriate avenue and bringing other like messages along for the ride.
Web Scatter
What brought me back to the idea of Ambiance Scatter after all these years? For one, it's a framework through which I'm writing a more substantial post on Twitter (hopefully to be out next week).
But another reason is because of an important slide I saw in presentation given by Drop.io's Sam Lessin a few weeks ago:
In this slide, Sam articulates a similar "scatter" model I use for communication -- the idea that "over time, everything finds its place" -- but for the entire Web ecosystem of applications and workflows.
In Sam's model, however, applications are different than communication: instead of there being a "constantly and increasingly fragmenting and coalescing stream" of options, there's a natural order, with all applications moving towards their natural, fixed category of distribution, identity, or content/IO.
Now, Sam, of course, is invested in this call, and this slide (which I've posted with his permision) probably articulates more about his company's strategy than one can immediate tell by looking at their homepage, but I'm posting it is because of its value as a framework through which to see the rest of the web.
For instance, if you were to ask me what's going on with Twitter these days, I'd channel Lessin and tell you that Twitter is increasingly finding itself in its natural place as a distribution mechanism. That's it. On Twitter, identity is dead, and content is whatever's on the other end of that link you included, unless you could fit your message in the signal's 140 character limit (which many succeed at, confusing the matrix).
Now take Facebook... is it a content platform? A distribution platform? An identity platform? Like Twitter, there are a lot of smoke and mirrors to be distracted by here, but at the end of the day Facebook at its purest will be an identity platform. Each of these claims may deserve their own blog posts, so I'll just point out the influx of Facebook Connect around the Web and how quickly most content and distribution companies have given up the idea of owning identity and ceeded control of this aspect of the ecosystem to anyone and everyone -- especially Facebook.
This brings me to AnyClip and the content ecosystem.
As we're building out The AnyClip Stack, we must keep in mind what role we serve in the larger Web ecosystem, and embrace -- like Drop.io embraces -- its position squarely in the content ecosystem.
We are not an identity company... and so while we'll let you have an AnyClip account, we'll promote the ability to login using Facebook Connect and, eventually, any OpenID provider.
We're not a distribution company... and so aside from our own flagship applications on the Web, Mobile, and you Livingroom, we'll let 3rd party developers build the majority of applications which distribute our content.
In the end, we're a content company. We're taking valuable video content and giving people access to the very pieces which matter to them, while we also give compensation to the people who made the content. For the movie business, this is important work, and doing anything but acting as the "IO" for movie clips is a distraction.
Web Scatter is an important way I've started to look at the future of the Web. I hope it's useful for you too.
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The Interwebs – Episode 1
The Interwebs has officially launched!
While we put together a bunch of interviews at SXSW, this episode marks the real launch of a full show.
In it: a quick segment dedicated to the headlines, a VC interview, a mobile trends segment, and "Vital Signs" - a segment about the business of making a web show!
Full summary here:
0:24 - This Week
Nate recaps the news about Obopay and Nokia, and Skype on iPhone0:59 - I Want To Spend My Money
Chris Sacca (@sacca) discusses investing in companies that build things on the back of Twitter, NYC band PR startup Fanbridge, and how to start up, build, and exit a company in this economy.3:30 - Mobile Behavior
Alli and Laura of NextGreatThing talk about personalities and mobile devices. Phone is the new car.7:04 - Vital Signs
Quirk and Nate talk about their first week making The Interwebs, divulge viewership and financial stats, and talk about past and future sponsorships.
Would a Google Antitrust Suit be Good for Startups?
Yesterday, Silicon Alley Insider wrote that Obama's pick to head the Justice Department's antitrust unit is decidedly and publicly anti-Google.
Now, as Henry Blodget put it, this in no way means a certain antitrust movement against Big Rainbow (Google):
Hard to view this as anything but negative for Google. A strident government attack on the company seems unlikely (and ill-advised), but Google's future moves will almost certainly be more scrutinized and restricted than they have been to date. That's not good for shareholders.
However, I wonder if we as startupers -- rather than shareholders -- should encourage or discourage such an action.
In the past, of course, startupers and VCs have rushed to Google's defense (see my Google Antitrust articles from 2007). Not only has Google maintained relatively good Karma among the early stage community (awesome APIs will do that), but also Google has been seen as an attractive exit option for startups ever since they went public in 2004 and began a buying spree.
However, an analysis of this list of Google acquisitions (graphed below) reveals a suppressed appetite in Mountain View, leading me to wonder if keeping Google as a monolith is such a great thing for startups and VCs, who -- in a SOX environment -- increasingly rely on acquisitions as a way to realize the value of their company or investment.
If Google's status as a monopoly were taken on by the Justice Department (and if the DoJ prevailed), Google would likely split itself into several smaller companies, leaving the world with several powerful, cash-rich micro-Googles, in turn leaving with world with that many more exit or business development opportunies for startups.
On the flipside, if Google isn't split up, its obvious that Google's appetite for acquisitons will continue to slow, if not halt altogether, in fear of inducing futher scrutiny from the DoJ.
So, disregarding any political beliefs, corporate loyalties or grudges, I wonder: Should those of us in the startup market hope for a Google shakedown? Would an antitrust suit do us well?
The answer may be surprising.
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NewsHour “gets” Twitter
I'm a bit biased here (I used to consult with NewsHour through my work with National Public Media) -- and I'll write more about effectively using Twitter in forthcoming blog posts -- but I wanted to point people to this recent tweet by @NewsHour.
Most media organizations do two things wrong on Twitter.
They use their Twitter accounts to only to broadcast links to their stories.
They act like the Twitter account is somehow the voice of the outlet itself, rather than the voice of a real employee (who, in turn, is a real person).
From the start, NewsHour has done the right thing on Twitter. Not only do they tell people to watch other outlets when it's best for their followers (see above referral to CSPAN, as well as this referral to NPR) but they also tweet with a human voice.
I still remember this tweet from the Democratic Convention, when Online NewsHour Anna Shoup went on the convention floor (shortly after I had been hanging out with the NewsHour crew in one of the media tents (photo right).
floor access closed unless you have a seat. I don't. Outside rim s till packed
That was Anna talking. Not some bot.
That's "getting" Twitter.
Who is Nate?
You've found Nate Westheimer's blog. Nate wears many hats. He's the EVP Product & Technology and Co-founder of AnyClip, the Organizer of the NY Tech Meetup, and Advisor to Flybridge Capital Partners.
More about Nate can be read on his Bio page and you can follow his thoughts on Twitter
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