The Angel VC

Bye-bye 2011, hello 2012

2012-01-02T12:14:00.000+01:00

It's that time of the year – you're looking back to the old year and you're reviewing your plans for the new one. The last year was very busy for me, both privately and professionally. I became a dad for the third time, and I teamed up with Team Europe to create Point Nine Capital. Two startups, so to speak.

It's also a good time to take a look at my angel investments because from now on I'm going to make all new investments via Point Nine Capital. Last year I wrote a series of small portfolio review postings. This time I'd like to post some aggregated (vanity?) stats about my investment activity in 2011:

I've made 14 new investments in 2011, which brings the total number to 28

The new investments are: Lieferheld and Delivery Hero, Server Density, Fundly, Westwing, Shiftplanning, FinanceaCar, Vend, ChicChickClub, Unbounce, Cibando and 3 investments which haven't been announced yet
Out of these, 10 were co-investments with Team Europe / Point Nine (see, we dated extensively before we got married)
Before 2011 I've had 2 write-offs. In 2011 there were 0 write-offs, which means that the total number of active investments is 26.
15 of "my" companies did follow-on rounds at higher valuations in 2011 (some of these rounds were internal rounds, but most were external)
My ROI (on paper) stands at a little over 5x if you use the last rounds' valuations as the estimated fair-market value. If you try to factor in the increase in valuation since some of these last rounds, which in some cases happened over a year ago, it's probably closer to 8-10x.
No exits yet (but two small secondary sales, which together returned about 25% of the total amount I invested)

My portfolio is way too young to draw any final conclusions but it's obviously looking very good so far. Huge thanks go to all the incredibly talented and hard-working people at each of the 26 companies. Have a great New Year!

We came, saw and... invested

2012-01-01T11:33:00.002+01:00

Our last investment in the old year is a novelty for us – our first investment in a startup from Italy. Founded by 23 year old entrepreneur Guk Kim, Cibando operates a popular iPhone app that makes it easy to find the best restaurants in Rome, Milan, Florence and other Italian cities.

What makes this significant (beyond its obvious significance for Cibando and for us) is that this is one of only a very small number of VC investments in Italy. So significant, at least, that the news got covered by TechCrunch and also made it to the online frontpage of Corriere della Sera, one of Italy's oldest and most reputable daily newspapers!

To say that Italy's early-stage funding ecosystem is underdeveloped is probably an understatement, at least that's what I've heard in the last few months. Not that it's that great in Germany, although with the rise of Berlin as Europe's new tech hub it's hopefully getting better. But in Italy it seems to be much worse – so bad that many of the serious Internet entrepreneurs from Italy leave their country to raise money elsewhere.

It might seem odd that we as a Berlin-based VC invest in Italy, but part of our strategy is to be somewhat location-agnostic. While the majority of our portfolio companies are based in Germany or Poland (homeland of Pawel and Lukasz) we're open to investing in other European countries and even outside of Europe. In fact, some of the best investments that Point Nine Capital (and/or I as an angel investor) made were in pretty unusual locations: myGengo (founded in Tokyo), Vend (founded in New Zealand), Zendesk (founded in Copenhagen) or Clio (founded in Western Canada) are great examples. Some of these companies later moved part or their operations to the US or even relocated completely, but that's another story.

Back to Cibando. You simply draw a circle on a map to select how far you’re willing to drive and select your preferred restaurant category. Cibando then lists the best restaurants that match your requests, along with reviews, mouth-watering photos and other helpful information. Think of it as a mobile version of Yelp or Qype but with several special twists. Buon appetito!

Targeting the Fortune 5,000,000

2011-11-12T23:17:00.003+01:00

I've just read on TechCrunch that Peter Thiel, famous among other things for making one of the best investments in the history of mankind by investing in Facebook in its early days, said that he looks for platforms that are big among small businesses, not consumers. I couldn't agree more. Although there are of course plenty of exciting and profitable opportunites for consumer Internet startups, my main focus over the last three years has been on companies that provide a product, service or platform to small and medium-sized businesses. Some of the reasons:

Consumer startups often (not always) need enormous scale in order to become profitable. This is particularly true for advertising-supported businesses where the ARPU (average revenue per user) is very low. That means that you need to raise a large amount of capital, and because it's usually a winner-takes-it-all model, you have to expect a "digital" outcome – either it becomes a big hit or you lose. There's nothing inherently wrong with that, but for me the threshold for making an investment like this is much higher than it is in a case where you can follow a lean startup approach and where the downside is more limited.
Most of the large, old software players are focused on, and in some cases trapped into, the classic enterprise software sales model of selling complex, on-premise software for extremely high prices using large sales forces. Neither the products nor the distribution strategy work well for SMBs, which creates huge opportunities for startups to fill the needs of the Fortune 5,000,000 with easy-to-use, on-demand, pay-as-you go SaaS applications. Examples from my portfolio: FreeAgent (online accounting for freelancers in the UK), inFakt (online accounting for SMBs in Poland), samedi (resource planning for doctors in Germany), Vend (Web-based POS system) and many others.
Over the last decade, the Internet entered almost every area of life and chances are that if you're looking for anything – ANYTHING – you'll do it online. It doesn't matter if you need a doctor, a haircut, a pizza, a taxi or a mechanic – either you're looking (and booking) online already or you will in a few years. More and more SMBs understand this, they know that being online is or will soon be critical to their business. This leads to huge opportunities for companies that help SMBs go and be found online. Portfolio examples: Lieferheld (restaurant delivery), DigitaleSeiten (online directories, e.g. for roofers), StyleSeat (platform for beauty professionales) and several others.

Finally, by targeting SMBs you can reap an "unsexyness dividend". Consumer startups are generally just sexier, which leads to more competition. There are dozens if not hundreds of photo sharing apps, but how many companies do you know that build an online directory for roofers? It might be an interesting idea for a research project to try if it's possible to quantify the "unsexyness dividend" – talk about sexyness-adjusted returns along the lines of risk-adjusted returns!

Latst day to vote at The Europas

2011-11-01T09:54:00.004+01:00

On November 17, The Europas will be held, an annual awards for the Internet scene in Europa. My partners at Team Europe and Point Nine Capital and I are nominated in a few categories, so if you still need some inspiration on who you could vote for, here you go!

BTW, I feel bad about leaving a two months blogging hiatus with a self-serving post...but anyway. ;-) . A lot of the nominees are rallying people to vote for them, and the award is of course self-serving even for the organizer, TechCrunch Europe, which is encouraging all nominees to add banners and backlinks to their websites. So I'm in good company. But all joking aside, The Europas is a great event which features some of the best startups in Europe and celebrates entrepreneurship, something we can't do too much in Europe.

Now without further ado, here are the categories that we're nominated in:

Best European Startup Accelerator (Team Europe)
Best VC of the Year 2011 (Point Nine Capital)
Best exit 2011 (Brands4Friends acquired by eBay)
Best Angel or Seed Investor of the Year (Yours truly)

Here's the link to the voting page.

Bonus tip: In the Best Service Provider to Startups category my vote goes to the law firm Brown Rudnick for helping create the Seed Summit legal docs and for doing great work for European startups and investors in general.

Bored Meetings vs. Board Meetings

2011-08-21T11:00:00.008+02:00

One thing I've been thinking about for a while is how to make Board Meetings as effective as possible. If you want to read some great posts about the topic by people who've been to many, many more Board Meetings (and apparently Bored Meetings!) than I, check out these links:

Brad Feld's initial post on the topic back in 2004
Reactions by Fred Wilson (post 1, post 2, post 3)
More recent posts by Brad Feld and Fred Wilson, as well as Mark Suster

In my opinion it's not that much about whether a Board Meeting is boring or not (but the little pun makes for a good headline so I used it too). It's easy to have a good time in a Board Meeting – you talk about a variety of business issues, you learn from other Board Members' experiences, people tell anecdotes etc. It happens rarely that I'm bored in a Board Meeting, but non-boring does not yet equal effective.

The questions that I often ask myself after a Board Meeting are: What are the real, tangible, actionable results of the meeting? Was it worth the time, usually easily 4-5 man days if you count everyone's traveling time, or could the same have been achieved in a 1-2 hour conference call? For SF Bay Area startups, holding physical Board Meetings may be a no-brainer because everyone is close by anyway. But in Europe, getting all Board Members into one room usually means that at least half of them have to spend a day traveling.

The root cause why it's often hard to give a clear, positive answer to the question above (whether the meeting was worth it) is the dramatic information asynchronity between the founders and the investors with respect to the startup's business. It's just natural that the founders know ten times more about their business, but if the information asychronity is too large, the founders have to spend too much time of the Board Meeting updating the investors. Then it becomes an update meeting. (That has its own merits, but running through numbers and current developments isn't something you need an in-person meeting for. In my experience, one-to-many as well as one-to-one conversations can just as well be done over the phone or Skype. Many-to-many discussions about complicated stuff is where the advantages of a physical meeting come into play.)

Also, if the investors aren't sufficiently in touch with the company it'll be hard for them to provide valuable input, and most of the ideas and suggestions they come up with will be things which the founders have already thought about themselves months earlier.

So the most important thing that you as a founder can do in order to enable an effective Board Meeting is to provide a detailed Board Pack before the meeting itself. The Board Pack should be sent out at least 48 hours before the meeting to give the investors a chance to get simple questions clarified prior to the meeting. The investors of course need to do their part as well, i.e. read the Board Pack carefully and clarify questions before the meeting. The idea is to get almost the entire "update part" done prior to the actual meeting so that you have the whole meeting for the strategic or tactical questions that you'd like to discuss.

80% of the meeting's time should be allocated to these 3-4 questions and the goal should be that you leave the meeting with a conclusion/decision on these questions, or at least with significant progress and clear next steps. That means you may have to politely interrupt people to refocus the discussion. If information asynchronity is the #1 enemy of effective Board Meetings, the human tendency to digress is enemy #2. You have to fight both.

Finally, if there are no important questions that you'd like to discuss with your investors, don't hold a Board Meeting. Do an update call instead. Usually there's lots of things to discuss, but don't force it.

One last point, pre-Board updates every ~ 2 months are not enough to keep investors in the loop. If you want your investors to really know what's going on (and thus enable them to be much more helpful), send out a weekly update email with KPIs (or a link to your Geckoboard :-) ) and information on last week's progress, current problems and next week's priorities. That weekly email can and should be very brief so that it doesn't cost you much time to write it, but even just a couple of bullet points can be immensely helpful if they are provided routinely once a week (as a company gets bigger, bi-weekly or monthly updates are sufficient but in the early days I think weekly works best). Just like the founders should do their best to keep the investors in the loop, the investors of course should do their best to stay up-to-date as well – follow the company on Twitter, subscribe to the company's blog, read everything that's written by and about the company and its key competitors, and participate in the discussions on the company's "Board Basecamp" (a Basecamp site set up for the company's founders and investors, something which many of my portfolio companies have done and which is very valuable).

What we look for in early-stage SaaS startups

2011-08-10T15:47:00.004+02:00

I recently wrote that investors (myself included) should do a better job of making their investment criteria transparent to founders. Today I'd like to tell you a bit more about what we at Point Nine Capital are looking for in SaaS startups (other sectors are something for another blog post).

To put it as simple as possible, the health of a SaaS business is mainly determined by two factors: Customer lifetime value (CLTV) and customer acquisition costs (CAC). One could almost say that CAC and CLTV are for a SaaS company what wholesale price and sales price are for a retailer. Just like a merchant needs to buy products and sell them at a higher price, a SaaS business needs to acquire customers at costs that are lower than the customers' lifetime value. Costs of goods sold are minimal for a company selling software over the Web, and costs like product development decrease as a percentage of revenue when you get to bigger scale. So for a bigger SaaS player, sales and marketing costs are the driver of profitability.

There are of course lots of other metrics and factors that you can look at in a SaaS company: How good is the product, how big is the market, how strong is the competition, what's the churn rate, is the company growing organically, how good is the team, to name just a few. But the interesting thing is that most of these other aspects are factored into CLTV and CAC already: If CAC are low, the product has to be good, otherwise it wouldn't be that easy to sell (exceptions apply). If CTLV is high, churn can't be that big. Similarly, if there are stronger competitors in the market, aggressively marketing a better product, it's unlikely that the company's CAC will be low. And if a company has a great CAC/CLTV ratio, the team almost has to be great because you have to execute well in all areas in order to achieve that.

Of course I'm not saying that everything is captured in those two metrics, and because they are based on present and historic data they won't reveal future developments of the industry that you're looking at. But at the minimum, looking at these two metrics is a great start when you as an investor evaluate a SaaS company.

Provided that there is some data on these two metrics, that is.

But early-stage SaaS companies which are still in public beta or just went live don't have this data yet. Getting meaningful data on your CLTV takes time, since calculating it based on the monthly churn rate of your first few customer cohorts isn't reliable. And it takes even more time until you get an idea of your CAC because you have to set up marketing programs, try various things, recruit and train sales people and so on, and of course improve the product, the on-boarding experience etc. along the way. I'd say it'll take you at least 6-12 months following your product's launch until you may have reasonably reliable data on CAC and CLTV if everything goes well – and much longer if you've got hiccups along the way.

As early-stage investors, we aim to invest in a company earlier than that so we have to look for other things – leading indicators for great CAC/CLTV ratios in the future, so to speak:

Visitor-to-trial conversion rate. If it's high, it indicates that your target audience is interested in your product. It also says a lot about your ability to communicate the value of your product clearly and with few words, which is essential for products that are sold online. And obviously, the higher your visitor-to-trial conversion rate is, the lower is your CAC, all other things being equal.

Trial-to-paying-account conversion rate. An extremely important metric, for obvious reasons. If people pay for your product, that's the best sign that you're delivering real value to them. And again, higher conversion means lower CAC.

Engagement and retention of your early users. It's hard to get meaningful churn data within just a few months because companies often don't terminate their accounts right away when they stop using a SaaS product, especially if your product has a low price point. Therefore we have to look at usage metrics such as daily or weekly logins and various application-specific metrics to find out if a product is really used by its customers, which of course is the basis for a viable business and high CLTV in the future.

Enthusiasm of your early users. Having a number of early users who are absolutely in love with your product is extremely valuable, even if it's a small number in the beginning. Those users will recommend your product to everyone they know, give you great testimonials, help you get your first case studies, get the word out on Facebook and Twitter and maybe even help other customers in your support forums. And for us, these VIP users are a strong signal that you're solving a real pain and hence a strong indicator of product/market fit (which is the basis for low CAC and high CLTV).

Your team. Last but not least and at the risk of stating the obvious, we only invest when we're extremely confident in the founder team. That doesn't mean that you have to be a serial entrepreneur or that we expect decades of experience (as much as we appreciate that!). As early-stage investors we're happy to work with young entrepreneurs who are smart, dedicated, talented and results-driven. We're happy to help you complete your team and coach you in areas like sales & marketing, SaaS metrics or fundraising which you may have limited expertise in. The one area where we think you do have to excel is your product. You have to be able to create an awesome product and a beautiful website that sells your product. You also have to "get" modern SaaS – that whole idea around consumerized business applications that are powerful yet easy-to-use and can be sold online using a low-touch sales model. We strongly believe that this need to be in the DNA of the founder team.

There are other factors that we look at, such as market size and competition, but the ones described above are among the most important ones. I hope this helps a bit – if you have any questions please leave a comment or email me.

The land of a thousand niches

2011-08-01T00:34:00.008+02:00

I just came across a great blog which I hadn't been aware of yet: "VC Matters" (100 points if you get the pun), written by Rory O'Driscoll of Scale Venture Partners. Rory has an incredibly successful track record of SaaS investments, having invested in home-runs like Omniture, ScanSafe, Box.net, DocuSign, ExactTarget and many others. After reading through his posts I immediately added his blog to my RSS reader and to the "must-read list" of recommended resources that I maintain for the founders of the SaaS startups that I have invested in. I'd say Rory is one of the Top 3 VC bloggers about SaaS, the other two being David Skok of Matrix Partners and Philippe Botteri, who recently moved from Bessemer to Accel.

One of the things that Rory talks about is the surprisingly large size of a surprisingly large number of niches in business software:

"A phrase that stuck in my mind from a 1994 software report, was the description of the business software market as a 'land of a thousand niches'. [...]

Business software, unlike either the consumer internet business, or the technology infrastructure business, is not a monolithic market, but instead is a series of separate vertical and horizontal opportunities. [...]

As a result there will be many medium sized, ie $1.0 Bn plus, SaaS technology companies built over the next five years to satisfy these various needs."

As an investor in Propertybase (CRM for the real estate industry), Clio (practice management for lawyers), samedi (practice management for doctors), FreeAgent Central (accounting for freelancers) and other SaaS startups targeting vertical niches, I wholeheartedly agree. Each of these companies operates in a niche, but these niches are so large that each of these companies has the potential to become worth several hundred million dollars.

Rory continues:

"A great example to me of a vertical is that has massively exceeded what I would have guessed as its potential is Real Pages. The company focuses on automating the process of managing residential apartment buildings. My gut would have been “niche vertical, not that interesting”. Turns out I was wrong. Real Pages has a$1.8Bn market capitalization and $200 MM in trailing revenue! I believe this is indicative of what will be a multi-year wave of SaaS based application software companies in specific verticals or functional areas, generating $1Bn valuations."

That reminds me of StyleSeat, a startup that provides business tools and lead generation for the wellness & beauty industry and which Point Nine Capital has invested in. Correct me if I'm wrong, Pawel, but I think neither of us has a particular affinity with the wellness & beauty industry (I usually let my hair grow until my wife (thankfully) makes it clear to me that my look is absolutely unacceptable, and Pawel doesn't have a particularly maintenance-intensive hairstyle either). So initially we were a little skeptical about the market – until we learned that wellness & beauty is a $40B industry in the US, with about 250,000 beauty salons and employing about 850,000 people. Gotta love "niches" like this!

Greetings from the dark side

2011-07-18T16:24:00.006+02:00

It's not really news any more because we've already announced it a few weeks ago, and TechCrunch and Gruenderszene wrote about it already. But I haven't written about it on this blog up until now, so in case you haven't heard about it yet here you go: I've teamed up with Team Europe to create Point Nine Capital, an early-stage VC which will follow in the footsteps of the highly successful Team Europe Ventures fund, which I've been working together with informally in the last two years.

So in other words, after more than a decade in entrepreneur-land and three years in angel-heaven I'm now going to the dark side of VC-underworld. That's bullshit, of course, but I needed an excuse to make that "went to the dark side" joke (which is starting to get trite, sorry) and post that picture which I found googling for "the dark side". And in fact, I'm not leaving angel-land completely, since our goal at Point Nine Capital is to be "The Angel VC", as the tagline below our logo says.

What that means is that although we are a (small) VC fund, we're acting more like your friendly angel investor – no large committees, faster decision-making and importantly, simple and founder-friendly terms. At the same time, entrepreneurs partnering with Point Nine Capital will benefit not only from my personal expertise and network but also from the vast experience of my partners and colleagues.

More information about Point Nine Capital is available on our website, and feel free to email me if you have any questions!

Saying "no"

2011-06-01T01:46:00.004+02:00

Being an angel investor is a fantastic job. Every day you meet great new people, cool products, exciting technologies and interesting new business models. Nothing (in business life) is more exciting than seeing a company grow from two-guys-in-a-garage stage to become a relevant or maybe even dominant player in a large industry sector, and as an early-stage investor you have a realistic chance to be part of some of these success stories. Maybe it’s the best job next to being the Pope, to quote former German Vice Chancellor Franz Müntefering (he said that when he became Chairman of the Social Democratic Party in Germany, probably one of the scariest jobs in German politics).

There’s one thing that sucks though. You have to say “no” all the time. Whether you’re a private investor who invests his own money or a VC managing a fund, chances are that for every investment you make you’ll have to say “no” at least 20-50 times. If you make a couple of investments per year, that’s a lot of “no”s.

In fact, if you don’t see something like 20-50 startups for every investment that you make I think it’s unlikely that you’re doing a good job and that you’ll make money. It either means that you have poor deal flow (investor lingo for investment opportunities that you have access to), that you don’t have prudent investment criteria, or both. The best VCs see hundreds of deals for every investment because they have the best deal flow and invest extremely selectively. That’s even more “no”s.

Now, I don’t have an issue saying “no” to a founder after having taken the time to evaluate his startup carefully. Whether I’m not convinced of the product, think the market is too small or feel there’s too much competition – there are all kinds of possible reasons why I don’t want to invest in a company, they are legitimate, and I can share them with the founders. That kind of candid and competent feedback is almost always appreciated by the entrepreneur and will often help them focus more strongly on specific weaknesses of their business.

The problem comes in when there’s no specific reason for the rejection and the startup just didn’t excite you enough to make it into those maybe 10% of startups which you decide to give a full evaluation. In most of these cases most investors will say to the entrepreneur something along the lines of “We really like your concept but it’s a bit too early for us. We’d love to take another look when you have a little more traction”. Which is not untrue, but in many cases is just another way of saying “I don’t know the market well enough to form a real opinion. Somehow your product or your team doesn’t get me sufficiently excited relative to all the other deals that I have on the table. Or maybe I just don’t have enough expertise in what you’re doing. Whatever. Please come back when you can prove with real data that there’s a market for your product and that you’re able to sell it (and I hope that by that time you’re still interested in my money)”.

For the founder, answers like these are of course useless and can be quite frustrating, especially if he talks to dozens of investors and keeps getting similar feedback. That’s actually quite sad if you think about it – smart, young, passionate people who leave secure jobs to work 70+ hours a week to turn their vision into a reality get rejections and more or less useless feedback on what they may have to do differently.

So what can be done? Firstly, I think, it’s important for founders to understand that because of the large volume of potential investments which all VCs see, only a small percentage of the startups can get a close look. All VCs I know are very hard-working people but there are just not enough hours in the day to take a close look at every deal. Moreover, although whether or not your startups makes it into that small percentage is largely dependent on your story, there are also outside factors at work which you can’t control at all – for example, it depends on how many other attractive deals the VC has on the table when you start talking to him.

Secondly, many investors (myself included) could do a better job of making their investment criteria transparent – those factors which determine if you take a closer look at a startup or not. On most VC websites you’ll read something like “We look for exceptional teams which have built a great product to disrupt a large market”. Pretty vague. An example of someone who does it right is Bessemer Venture Partners. In their “6Cs of Cloud Finance” article they say, referring to the Customer Acquisition Costs Ratio of SaaS companies: “Anything above one means you should invest more money immediately and step on the gas (and please call Bessemer immediately because we want to fund you!) as your customers are likely profitable within the first year". Of course there's also a lot of gut feeling involved and VCs also have to trust their instincts when deciding which deals to pursue further – but it must be possible to distill some of this into criteria which others can understand.

So – I’ll post some details about my investment criteria here shortly. Promised. Until then I will occasionally point founders to this blog post to show them that I at least take the issue seriously.

Developers, developers, developers…developers, developers, developers

2011-03-20T03:19:00.006+01:00

If there’s one thing that all fast-growing technology startups have in common, it’s that they’re constantly looking for great developers. Microsoft CEO Steve Ballmer got it right:

My portfolio companies are no exception, almost all of them are looking for engineers in various roles right now. So – if you’re a great developer and you’re living in San Francisco, Edinburgh, Vancouver, Berlin, Cracow, London or Munich (or willing to relocate) and if you want to join one of the best SaaS companies in the world, check out these job postings.

Zendesk (San Francisco)

QA Engineer

Front End Developer

Ruby on Rails Engineer

FreeAgent Central (Edinburgh)

Ruby on Rails Engineer

Clio (Vancouver)

Senior UI Designer

Software Developer

samedi (Berlin)

JavaScript Developer

Ruby on Rails Developer

Integration Engineer

inFakt (Cracow)

Ruby on Rails Developer

Geckoboard (London)
Lead Developer

Propertybase (Munich)

Ruby on Rails Developer

P.S.: If you’re like me and you’re not an engineer I (probably) won’t have a job for you but I’ll buy you a brand new iPad 2 for a successful referral of a candidate for one of the positions listed above!

"Launching a web startup became 10x cheaper..."

2011-02-25T04:40:00.002+01:00

The conventional wisdom is that starting a web business is (at least) 10x less expensive today than it was 10-15 years ago. It’s said that a decade ago, you needed millions of venture capital in order to launch an Internet startup whereas today, thanks to open-source software, cheap hardware and new ways to acquire users for free (in particular virally via Facebook/Twitter and with SEO via Google), you can do the same with a small fraction of that. And that, while great for entrepreneurs, makes it difficult for large VC funds with many hundred million dollars under management, to deploy their capital because startups ask for less money.

I’ve heard it dozens of times, from VCs, founders, bloggers and others. It’s almost like a mantra, part of the Web 2.0 creation myth, which everyone believes without challenging it. I always wondered if that theory is true, because it didn’t cost Christopher Muenchhoff and me more than about $100 to build and launch DealPilot.com in 1997. That, approximately, was the cost of one month of shared hosting, and in the second month, revenues paid for the hosting costs already. The first “big” investment was our own server, around $3000 as far as I remember. We did raise some money to expand the business later, but that was much later – around nine months after launching the service. So it clearly was possible to launch a state-of-the-art web service back then with little to no investment. DealPilot.com wasn't the only one, of course, I'm just using it as an example.

When I say “state-of-the-art”, I mean state-of-the-art based on 1997/1998 standards, of course. That's what was needed to be competitive. We of course wouldn’t have been able to build a video streaming site à la YouTube for $100 (hardware and bandwidth was too expensive), and launching an online shop would have been more expensive too (Magento didn’t exist yet). That’s logical, but trivial, and not what the theory wants to say, right?

In other words, I think the theory surely is that “starting a web startup in 2011 that is competitive in 2011 costs 10x less than it cost to build a web startup in 1998 that was competitive by 1998 standards”, right? (If the theory was “starting a web startup in 2011 that is competitive in 2011 costs 10x less than it cost to build a web startup in 1998 that was competitive by 2011 standards” that would of course be true, but I think it wouldn’t mean anything. Being competitive by 2011 standards (often) means that you need an iPhone app. In 1998 there was no iPhone. Get the point?)

And that is what I’m questioning.

Now, if the theory is wrong and it wasn’t that much more expensive to build a web business back then, why did startups raise so much VC at the end of the 1990s? One possible answer is simply “because they could” (and because everyone else did, and you didn’t want to be overtaken by better-funded, faster-growing competitors). Fuelled by a crazy IPO market, there simply was an incredible amount of venture capital available. Maybe that’s the real reason, or at least part of it, why it now appears that launching a web startup was so expensive in the 90s. What do you think?

Geckoboard – Your Business in Real-Time

2011-02-04T02:33:00.002+01:00

I’m thrilled to announce that together with Robin Klein at Index Ventures, Dave McClure’s 500 Startups fund and my friend and former Atlas Venture partner Alexander Bruehl I’ve made an investment in Geckoboard. Geckoboard is a beautiful real-time status board that lets businesses keep an eye on all the indicators that matter to them.

It’s a bit like “Pageflakes for businesses” (although “Chartbeat for everything else” is probably a better analogy), which is one of the reasons why investing in Geckoboard was a pretty easy decision for me. Another reason is that Geckoboard will be provided as a web-based service, with a free trial and a pay-as-you-go subscription model. Exactly the kind of SaaS business that I’ve developed a focus on in the last two and a half years. Another reason was the huge demand for the product's beta invitations (one of my favorite requests for a beta invite is this tweet, but there are many more). And of course the fact that the company was founded by an extremely sharp guy, Paul Joyce. Yes, a lot of reasons.

I also have a strong bias for startups with websites and applications that look beautiful because I think that's crucial in a world of consumerized enterprise applications. The talent and the experiences to create software that looks and feels great is rare and probably under-rated, but Paul and his team have it. Check out how awesome Geckoboard looks, no matter if you view your dashboard on a large wall-mounted screen, a computer monitor, an iPad or an iPhone.

To ask or not to ask (for the user's credit card), that is the question

2011-01-11T18:00:00.005+01:00

I've just answered a question on Quora and thought it might be worth cross-posting it here. Just in case there's still someone who isn't using Quora yet (admittedly unlikely given their current growth rate which is absolutely incredible).

The question was:

"For web apps, is it better to ask for the credit card before their trial starts (e.g., on the signup page) or after their trial expires?"

My Quora answer follows below.

* * * * *

I don't know the answer, and there probably is no general answer, but I recently put together a little model that helps to understand the determinants better:

Click here to open the Google spreadsheet

The blue values are sample (dummy) input values that you can change. The model is based on the following ideas and assumptions:

There are two types of visitors: Those who sign up whether or not a credit card is required (let's call them Group 1) and those who sign up only if no credit card is required (Group 2). There is of course a third group, those visitors who don't sign up in neither case, but we don't need them here.
If you require a credit card you have a certain visitor-to-signup conversion rate from the users of Group 1 (cell D8 and D32). And per definition, no signups from Group 2 users in that case (D33). If you move to a no-credit-card signup, on top of the signups from Group 1 (D9 and E32) you get a certain amount of signups from Group 2 users (E33) so your total visitor-to-signup conversion rate is higher (E34).
Looking at the trial-to-paying conversion rate, let's assume there's a baseline conversion rate of Group 1 trial users in the CC-required case (D12 and D38). If you remove the CC requirement I would expect that rate to drop (D13 and E38), because a) trial users who have provided their CC already may feel higher 'pressure' to try the product within the trial period, they feel more 'invested' and are less prone to procrastination; and b) doing nothing is easier than actively terminating your account. Some users will forget to terminate or just don't care.
Looking at Group 2 users, again of course no signups or customers in the CC-required case. In the no-CC case you'll be getting a certain amount of trial-to-paying conversions from those users (D15 and E39). I would expect that rate to be lower than the baseline conversion rate because Group 2 users are, on average, inherently less interested in your product than Group 1 users (more tirekickers).

So far so good. You can see the number of paying customers for each of the two cases in row 40.

The next thing to look at is churn, i.e. users who cancel after you've charged them at least once (I'm using charged-at-least-once as the definition of a 'paying customer' in the model):

I would generally expect the churn to be higher in the first few months following conversion to paying because some users may still be in their 'extended trial period', even if they're paying already. Also, the longer your customers use your product, the more value they will hopefully derive from it so they get less and less likely to cancel (D19 vs. D 21).
In the CC-required case I would expect that difference in early churn and later churn to be higher, maybe much higher, because many of the users who forgot to terminate within their free trial will terminate within the first months after subscription (D18 vs. D20).

Using the data on customers, churn and your revenue (or gross profit) per customer per month you can now calculate if you're better off requiring (D48) or not requiring (E48) a CC upon signup. One last factor that I've included is the cost that it takes to serve a trial user, e.g. bandwidth and time from your support team, which may or may not be significant depending on the nature of your business.

There are of course a couple of caveats:

The sheet is completely useless until you've tested it and until can fill it with real data. The purpose of the model is NOT to replace real-life testing by making some assumptions and pretending that that lets you decide which option works better. Quite the opposite – the purpose of the model is to understand which parameters you should look at and measure.
The model doesn't include all factors which may be relevant (their relevancy depends on your business, and I didn't want to make it too complex). For example, one question is if you consider tirekickers an asset (because even if they're not interested in buying your product yet, they may tell their friends about it or come back to you later) or a burden (because they divert resources away from the more strongly interested prospects). Another factor that I haven't included are different pricing plans – I've included just one price per customer per month.

Feedback very welcome!

Portfolio Update Part 4

2011-01-10T12:33:00.003+01:00

Here's the fourth and last part of my 2010 portfolio update. The first three are here, here and here. The last (but definitely not least) update takes me back to Berlin, which is not only home to my portfolio company Momox, covered in the first update, but also to another great company that I've invested in together with XING-founder Lars Hinrichs: samedi.

samedi offers a SaaS booking and resource planning solution for doctors in Germany. In some ways, samedi is doing for physicians what Clio is doing for lawyers – provide an easy, secure way to manage your practice from any device that is connected to the Web. Using samedi, physicians and clinics can also easily offer their patients a way to conveniently make appointments online, 24 hours a day, 7 days a week. samedi also allows healthcare providers to optimize their practice workflow using a simple ERP solution and lets practices, health insurance companies and other players in the healthcare industry collaborate online.

Bringing the healthcare industry, which at least in Germany is pretty old-school and bureaucracy-ridden, into the Cloud age is a very tough nut to crack but there's a huge reward for the company that pulls that off. And if there's anyone who can do that, it's the founders of samedi, Katrin Keller and Dr. Alexander Alscher who have the relentless persistence (and the ability to do with very little sleep) that is necessary in that market. After a slow-ish start in 2008 and 2009, samedi started to take off in 2010. Having grown revenues six-fold in 2010, samedi is now used by more than 2,000 physicians and other health practitioners to manage more than one million patients. Thank you, Katrin and Alex, and on to a great 2011!

This was the last part of my little series. My other investments have not or not yet been announced, but expect to hear some exciting news pretty soon!

Portfolio Update Part 3

2011-01-04T17:25:00.005+01:00

Here's the third part of my 2010 portfolio review. If you're new here, please start with part 1, move on to part 2 and then (hopefully) return to this post.

The next stop is Crakow in Poland, home of inFakt.pl. inFakt.pl was founded in 2008 by two extremely sharp students of the Cracow University of Science and Technology who wanted to build a simple, easy-to-use, web-based invoicing and billing application for small businesses in Poland. I invested in the company together with Team Europe Ventures early last year.

2010 saw the company dramatically expand its product offering to become a complete accounting solution for SMBs in Poland and grow the team from just five people at the beginning of the year to 14 today. To date, more than 80,000 companies have signed up for the software, which is marketed using a freemium model, making us the largest provider of our kind in the Polish market. Dziękuję bardzo, Wiktor and Sebastian, and congrats on a very successful year!

Another investment that I made in 2010 is Propertybase. Propertybase, based in Munich, offers a simple-to-use yet powerful software solution (do you see a pattern here?) for people in the real estate industry. It offers real estate developers, agents and brokers a complete CRM solution which allows them to capture leads, create sale and lease offers and agreements, manage listings, track payments and more. Since the software is entirely web-based, users can enjoy all the SaaS advantages that make the movement from on-premise to on-demand so irresistible: Never worry about updates, backups and security, access to your data from anywhere, easy integration with other Cloud-based offerings.

Apparently the real estate industry worldwide has been waiting longingly for a solution like this: In 2010, Propertybase won customers from more than ten countries and four continents and grew its customer base by more than threefold. And our customers really love us – so far our churn has, amazingly, been zero. Thank you, Mike and Max, supa g'machd!

Portfolio Update Part 2

2010-12-26T22:53:00.005+01:00

Continuing my little 2010 portfolio review (here's part 1), the next stop after San Francisco (Zendesk), Vancouver (Clio) and Berlin (Momox) is Edinburgh, home of FreeAgent Central. By launching a flurry of innovative new features such as multi-currency support or project profitability analysis, in 2010 the FreeAgent team has shown again who's setting the bar for online accounting. An incredibly powerful yet simple-to-use application is what 1000s of users love us for (as well as the press), and is the reason why we've won a Software Satisfaction Award for the second year. And there's more to come. 2010 has been a big year for the company in other ways as well: In March we announced that we've taken a minority investment from and entered into a strategic partnership with IRIS, the leading supplier of software for accountancy practices in the UK with over 14,000 practice customers (50% market share!). Kudos and a huge thank you go to Ed, Roan, Olly and everyone else at FreeAgent Central.

The next portfolio company takes me to Tokyo. Konnichi wa, myGengo. myGengo is a pretty recent investment of mine which I've done about half a year ago together with Dave McClure and other angel investors. myGengo is a crowdsourcing marketplace for human translations – think Amazon Mechanical Turk for translations. myGengo connects people who need translations with qualified translators in a way that's much more efficient than it used to be and thus allows it to offer high-quality translations done by certified translators at affordable prices. Thanks to this very clever idea, extremely strong execution and lots of innovations (like an iPhone translation service and a very smart API), as well as a rapidly growing list of language pairs, my Gengo has more than doubled translation volume and revenues in every quarter this year. Even so, the young startup is of course just scratching the surface of the huge, multi-billion dollar translation industry, which makes me extremely excited about the opportunity ahead. Thank you very much and doumo arigatou gozaimasu, Rob and Matt.

Portfolio update (part 1)

2010-12-25T23:11:00.004+01:00

As 2010 is drawing to a close I’d like to take a moment to give you a quick update on my angel investment activities and more importantly, thank the incredibly talented and hard-working people who have made it such an amazing year.

Since becoming a full-time angel investor in 2008 I’ve made 14 seed investments, with 4-5 additional ones being on the way. Except for two of my first investments that didn’t work out – rookie mistakes, fortunately pretty small ones – I’m absolutely blown away by the success of each and every company in my portfolio.

Some highlights:

Zendesk has had a phenomenal year. In May we announced that we’ve reached 5,000 paying customers. We didn’t publish an updated number since then but I think it’s no secret that the number of Zendesk lovers worldwide has continued to explode throughout the year. With a world-class management team and Board, one of the best products and brands in B2B software and a recent $19M cash infusion Zendesk is ideally poised to bring Cloud-based zen and good karma to even more people in 2011. Mange tak to Mikkel, Morten, Alex, Michael and the whole crew.

Speaking of the Cloud, 2010 may mark a tipping point with respect to the adoption of Cloud-based services in the legal technology field: In 2010 my portfolio company Clio, which provides a web-based practice management solution for solo lawyers and small law firms, has grown its customer base by more than 400%. The company also continues to launch new features and initiatives pretty much on a weekly basis, boasts (by far) the highest trial-to-subscription conversion rate that I’ve ever seen and has a ton of great new stuff in the pipeline. Thanks and merci to you, Jack and Rian, and your growing team of hand-picked rock-star developers and industry experts.

The development of Momox, which has bought more than 8.4 million used books, CDs, DVDs and games from private sellers since 2006, has been equally impressive. We’ve grown revenue by more than 2.5x , recruited two stellar executives to head logistics and marketing, moved to a new 85,000 square foot warehouse, relaunched our online shop, raised a couple of million Euros from Acton Capital Partners and scaled up the whole organization to make sure that we can handle our continued growth. Huge kudos to Christian Wegner and his 150+ people in Berlin for this gigantic and successful effort – jut jemacht!

More in part 2.

Keeping your "friends" list up-to-date

2010-01-04T16:58:00.004+01:00

If you're reading this, chances are that you use at least three of four different social networking sites (or social bookmarking tools, microblogging services or other community sites) that let you “friend” or “follow” other people. I, for example, use Facebook, Twitter, LinkedIn and XING.

LinkedIn and XING I’ve been using for years and I find both sites to be invaluable tools for finding, connecting and staying in touch with people, as well as for checking references. Over the years both LinkedIn and XING have allowed me to get in touch with numerous people who otherwise would have been hard to contact. I think both sites are particularly valuable for younger people who do not yet have a large professional network, e.g. first-time entrepreneurs looking for angel investors, employees or business partners. It took me a little longer to adopt Twitter but meanwhile it has become one of my primary sources for news (and I became a reasonably active Twitterer). Facebook I don’t use very actively but it allows me to “follow” (almost) everyone who doesn’t use Twitter.

The challenge that comes with using multiple social networking sites is, of course, that you want to stay on top of all sites without wasting too much time. Meanwhile there are plenty of solutions to aggregate the news feeds of various social networks at one location. You can even do that with Pageflakes, despite the fact that the site is somewhat outdated by now (just look for the Facebook, Twitter, LinkedIn and XING Flakes in the Flake Gallery and add them to your page). However, to date I haven’t seen a single tool that automatically and easily keeps your friends list in synch across all sites.

What I’d like to be able to do is this: Whenever I make a new contact I’d like to check if the person is on Facebook/Twitter/LinkedIn/XING and connect with him or her. The tool could be integrated into Outlook, Apple Mail, Gmail and other desktop or web email applications. Right-clicking on any email address could bring up an “Add to my networks” option in addition to "Add to my address book".

Until someone develops a tool like this, here’s a workaround:

Add all people who you’ve sent an email to to your address book.
(Apple Mail lets you do that automatically if you choose “Previous recipients” in “Windows”. I don’t know if there’s a feature like this in Outlook, but there are some third-party tools that will do that for you. Gmail, as far as I know, automatically builds your address book based on the emails that you send and receive, right?).
Export your address book to a file (e.g. .vcf).
Upload your contact file to Facebook/LinkedIn/XING and choose the contacts that you want to connect with (make sure that you use the “See who’s already there” option as opposed to the “Invite” option to avoid spamming your whole address book with invitations!). Twitter unfortunately doesn’t let you upload contact files but you can upload your contact file to Gmail and have Twitter import your Gmail contacts (did I say it’s a workaround?).
Repeat 1-3 every couple of weeks or months.

It’s not elegant, but it works, and at least it’s less effort than maintaining your contact lists manually. If you know a better solution, please leave a comment!

Escaping spreadsheet hell

2009-09-24T23:16:00.003+02:00

Have you ever seen someone get excited about accounting software? Yes, I mean the kind of software for which you used to need a diploma in number-crunching and a PhD in bean-counting in order to be able to use it.

Enter PC Pro’s review of FreeAgent, the web-based accounting tool that I’ve joined as an investor and advisor earlier this year.

This is not one of those product reviews where someone spends an hour testing five different applications and writes a roundup afterwards. No, this guy has spent a year working with FreeAgent, so his opinion is extremely well-founded. The article gives a good overview of what FreeAgent is all about and why it’s so much better than Sage (which is or at least used to be the de-facto standard accounting software in the UK).

I urge you to read the full article, but if you want the conclusion only, here you go:

FreeAgent ranks in my top couple of web applications of any sort. As an extremely busy person, I confess to almost enjoying doing the accounts now!

It’s rare that I feel able to recommend a product unreservedly: this is one of those occasions. FreeAgent starts at £15 per month for a sole trader and, given the range of features and ease of use, could easily become your most important application for administering your business.

Congrats to Ed, Olly and Roan at FreeAgent Central for building such an outstanding product – and for managing to turn an extremely unsexy product category into something which people get excited about!

Paul Graham on Enterprise Software

2009-08-17T00:42:00.003+02:00

A link in today's TechCrunch posting about Y Combinator's "Request for Startups" idea brought me to an earlier "Startups ideas we'd like to fund" list, published by Paul Graham about a year ago. It's a terrific list of ideas, and I applaud Paul for sharing them (execution is everything!). If you're toying with the idea of founding an Internet startup and you're not sure what kind of business you're going to start, I highly recommend going through the list. I'm sure you'll find lots of inspiration.

One thing that I'd like to quote from the original article is the paragraph on Enterprise Software:

Enterprise software companies sell bad software for huge amounts of money. They get away with it for a variety of reasons that link together to form a sort of protective wall. But the software world is changing. I suspect that if you study different parts of the enterprise software business (not just what the software does, but more importantly, how it's sold) you'll find parts that could be picked off by startups.
One way to start is to make things for smaller companies, because they can't afford the overpriced stuff made for big ones. They're also easier to sell to.

Brilliant.

The Europas - Cast your votes!

2009-07-01T18:01:00.003+02:00

"The Europas", the tech award that was brought into being by TechCrunch UK's Mike Butcher (profile, Twitter account), is getting a lot of attention in the tech world at the moment. The award, which "honors the best tech companies and startups across the web and mobile scene from across Europe, the Middle East and Africa", will be presented in a big ceremony on July 9 in London.

I'm delighted that two of "my" companies (i.e. startups where I'm an investor and active advisor) have been nominated in the Best Enterprise / B2B Startup category – congrats to Mikkel and the team at Zendesk and Ed and his team at FreeAgent Central.

If you're a happy Zendesk or FreeAgent Central customer or partner (or if you just want to do me a favour :-) ), please go ahead and vote for us. There's no registration required so it's really quick and easy to cast your vote. The voting deadline closes today at 23:59 GMT so you'll have to hurry up a little.

By the way, I am also nominated in the "Best Investor Personality" category. Most of the other investors on that list have a lot more experience than I and have helped many more startups succeed than I, but if you still want to vote for me, here's the link. :-)

Guy Kawasaki's fun email signature

2009-03-24T11:22:00.005+01:00

I just got an email from the famous (and with respect to his Twitter activity, some would say infamous) Guy Kawasaki. His email signature is really hilarious, which is why I want to share it with you:

Sent from a MacBook not an iPhone.
--------------------------------------

Guy Kawasaki
Nononina, Inc.
360 xxxx Street, Suite 100
Palo Alto, CA 94301
http://alltop.com/

xxxx@xxxx.com (best way to get in touch)
650-838-xxxx office (you'll never get me here)
650-387-xxxx cell (Spinvox will convert voicemail to email so I don’t have
to listen to people ramble)
650-853-xxxx fax (what's a fax?)

http://twitter.com/guykawasaki (if you have no life)
http://blog.guykawasaki.com/ (if you want to see why I have no life)
http://holykaw.com/ (if you want to see how I have fun in my life)

(Replaced some details with Xs to protect his privacy in the unlikely case that he has any.)

Zendesk - Help Desk 2.0

2009-03-04T16:57:00.003+01:00

Following my long-due update on Pageflakes here’s an update on what I’ve been doing since I’ve left Pageflakes. After spending some time with my family at a beautiful place in the sun, I started to look for new opportunities (to be perfectly honest I of course couldn’t resist researching new ideas while we were still on Barbados. Caribbean beaches and a DSL connection, what more can you ask for?). For various reasons I wasn’t yet ready to start my own thing again so I started to look for existing early-stage companies where I could come in as an angel investor and advisor. To some degree I “went to the dark side” (of funding) as it’s sometimes referred to but I’m really trying to be worthy of the term “angel” investor by really trying to help my companies in many different ways.

The first company I’ve made an investment in is Copenhagen-based Zendesk, founded in 2007 by a rock-star team around CEO Mikkel Asger Svane. This is no new news since it was announced last June and covered by Om Malik and others but I still wanted to blog about it here. If you don’t know Zendesk yet, the company offers a beautifully simple yet powerful on-demand help desk solution. You can buy and operate the system online and never have to worry about downtime, upgrades, security, backup or training. Setup is extremely easy and you can be up and running in hours.

Any business that serves more than a handful of customers needs a help desk solution in order to handle customer questions and support requests. Existing solutions are expensive, painfully difficult to set up and hard to use. Zendesk combines a professional-grade feature set with a beautifully simple Ajax-based user interface that resembles everyday web applications. If you want to have more productive and happier customer agents and want to save money along the way, check it out!

An update on Pageflakes

2009-02-02T17:21:00.010+01:00

It’s again been a very long time that I wrote something here, and an even longer time that I wrote about Pageflakes or about what I’ve been doing since I left the company about a year ago. I did become a reasonably active Twitterer in the meantime though – the 140 character format is probably better suited for my literal talent! Anyway, I thought it’s time for a quick update.

One of my last blog posts about Pageflakes was about my attempt to convince Mike Arrington and Pete Cashmore that Pageflakes was the Next Big Thing, my goal for 2006 as I put it (half joke, half serious). While both of them were very skeptical about the whole thing in the beginning, Pete wrote a very favorable posting about us in October 2006. Convincing Mike was more difficult but he got more and more positive over time as well, covering our 2.0 relaunch as well as release “Flurry” and “Blizzard” (thanks, Dan, for introducing a nicer release terminology!).

With each of our major releases we made it easier to create a personalized page and to get all the best the Web has to offer on one page. I think we also raised the bar for the whole category of personalized homepages with each release. This is the result of a huge team effort, which the whole Pageflakes team can be very proud of, especially if you consider that our most important competitors were iGoogle, MyYahoo and (vastly better-funded) Netvibes.

Nevertheless, although we did get more and more users who loved Pageflakes and used it as their very own entry point to the Internet and did get considerable mindshare, especially in the Web 2.0 community, we (and the whole market, for that matter) never grew as fast as we hoped. One of the reasons was that as much as we tried to make the product as easy-to-use as possible, the barrier to adoption was still a tad too high for many users. Creating your personal page just never got as easy as watching a video on YouTube. YouTube offers users instant gratification. Your own Pageflakes page may provide you more value in the long term, but getting there also takes a little longer. Likewise, although we had considerable success in redefining the product category of personalized startpages into a more "social" one, Pageflakes never got (and never could get) as social as, say, MySpace. Although hundreds of thousands of users created an extremely diverse variety of Pagecasts and shared them with their friends or with the general public, the majority of our users just enjoyed their pages privately. That didn’t come as a surprise, of course – Pageflakes falls under the 90/9/1 rule whereas you have to connect with friends on social networking sites.

We did hope that the product would get more viral and social though, and in order to become the next Yahoo! (our slightly ambitious stated goal when we started at the end of 2005) we would have needed higher organic growth rates (ironically, if Yahoo! continues to fare as badly as it did in the last months, we can still become the next Yahoo! ;-) ). So when 2007 turned to a close, we had an award-winning product with a loyal user base that was growing but wasn’t big enough and wasn’t growing fast enough in order to monetize the service effectively in the near term. Around the same time, the appetite of VCs to fund companies like ours started to decrease, resulting in worsened terms for startups. In that situation, we thought our best choice was to partner with a large player that has a huge amount of users.

Many know the rest of the story: In April 2008 we got acquired by LiveUniverse, the new media company of MySpace founder Brad Greenspan. Unfortunately our initial enthusiasm about the deal started to fade away quickly since Pageflakes quickly started to suck. First just a little (no more new features), then more and more (bad customer service, sudden introduction of obtrusive ads on users’ pages without any communication, downtimes), and the last dark climax was an outage of about four days without any communication from LiveUniverse to its users, causing a ton of understandable complaints of Pageflakes users on Twitter. It took me a long time to admit this publicly and I really don’t like to badmouth the company that bought Pageflakes, but it’s time for me to say sorry to all Pageflakes users. If a super loyal Pageflakes user like Phil Bradley has to write a blog post like this, you know that you have crossed a line. Phil has been using Pageflakes for years and wouldn’t leave the service light-mindedly. But enough is enough – his post says it all.

As of right now, Pageflakes is up again but because of the almost complete lack of communication on behalf of LiveUniverse I don’t know how long it’ll stay up and running. The company told CNet's Webware on Friday that the downtime was due to a data center migration but I don’t know if it’s true. Other reports indicate that they are in trouble. I’ll continue to use Pageflakes for now and will keep my fingers crossed that LiveUniverse will change course. If you do have to shut down the service, dear Brad Greenspan, please give the users at least two weeks’ notice to save their data and move to another service. There are many legitimate reasons why a company can fail or why a service needs to be shut down. But you really have to make sure that users get a chance to save their valuable data. Failure to do this is not only puts Pageflakes users in trouble, it also undermines users' trust in the cloud in general. Thank you.

The New Digital Divide

2008-05-07T00:56:00.003+02:00

Shafqat over at Newscred, a digital newspaper which is currently in private alpha, wrote a good post titled "The New Digital Divide - Building Web Services for the Mainstream". His point is that the chasm between early adopters on the one hand and mainstream users on the other hand is getting larger:

The mainstream don’t even use or understand RSS, but us techies have moved on to Twitter and FriendFeed.

Very true. While it's great to see all those new Web 2.0 ideas, innovations and technologies coming up every day, we (the Web 2.0 community) also have to avoid creating lots of products which no one else except ourselves is going to use any time soon.

If your startup's plan is to acquire millions of customers over the next few years (which is likely if you want to make money by selling ads), do a reality check and explain your idea to some "real" people among your friends and family.

Also read Josh Kopelman's great article about the same topic.

A nice way for your beta site to say "Feedback please"

2008-04-22T22:43:00.004+02:00

Have a look at the screenshots below:

What do these otherwise completely unrelated Web 2.0 sites have in common? Instead of the good old "Send Feedback" link in the page footer, all three of them prominently feature a large, red, eye-catchy "beta feedback" badge.

If you click on the badge, a window that contains the feedback submission form pops up; usually instantly, without a full page reload, so you can type in your feedback right away. Often the background of the page is greyed out, producing a lightbox effect which puts the feedback form into full focus.

I think this is a smart advancement of the notorious Web 2.0 beta badge. If you’re featuring the "Send feedback" link so prominently, firstly and obviously more people will notice it and provide you with valuable comments, bug reports and suggestions. Secondly, you show your audience that you really care about what your users think. Consider using this emerging UI pattern - at least as long as you’re in public beta (which you might be forever).

Microhoo: I (almost, kinda, sort of) told you so ten years ago

2008-02-03T14:16:00.001+01:00

When I was reading the news about the proposed Microsoft/Yahoo! deal, for some reason it recurred to me that I was speculating about Microsoft buying AOL in a Usenet forum back in 1997. Yahoo! isn't AOL and the idea was pretty far-fetched at that time, but interestingly enough Microsoft's rationale for buying Yahoo! at the beginning of 2008 looks similar to the rationale for buying AOL more than ten years ago.

Pagebull - your visual Internet search engine

2006-12-08T04:07:00.002+01:00

A few days ago, Pagebull went from stealth mode into public beta. Pagebull is the latest brainchild of my good friend and long-term business partner Christopher Münchhoff. It's a new search engine that provides a radically new user interface: Instead of a text-based list of the sites that match your search query, it shows you a grid of large screenshots of those sites.

The idea behind Pagebull's approach is that when you go to a site, you'll often know after a second if the site has what your looking for or not - and an inappropriate amount of time is wasted going back and forth between Google and the "target" sites. Pagebull now lets you glance over nine or more screenshots at a time, saving you the effort of clicking from one target site to the next.

What's interesting is that Pagebull benefits from two important industry trends: More bandwidth and larger screens. Using Pageflakes on a 30" screen and a super-fast cable connection must be fun!

It would be interesting to conduct a study to find out how much time Pagebull saves an average Internet user who spends, say, an hour per week on Google. Then just extrapolate that to all American office workers, and the US economy can probably save a few billion worth of productivity per year. ;-)

Seriously: Pagebull will not drive Google out of business any time soon, but it's an extremely impressive, innovate approach to improve the search engine user experience on the Web.

Try it!

Pageflakes 2.0

2006-11-03T00:56:00.001+01:00

About two weeks ago we launched a new version of Pageflakes and it's time to finally announce it here, too! If you go to the site, you will notice the big facelift that the site received. The fresh new look might be the most visible change, but it's by far not the only one. The long list of improvements and new features of the new version includes:

Page Templates
Dozens of pre-created page templates for topics like work, family, sports, finance, entertainment, education and much more. Now it takes just a mouse click to add a whole page with the best modules for a certain topic area.
Feeds and Podcasts
A Feed Directory and a Podcast Directory with hundreds of news feeds and podcasts from all over the world and for almost every category.
Community Site
A new Pageflakes community environment at www.pageflakes.com/community which allows you to search, submit, rate and discuss flakes and do much more.
Share your page!
Setting up a shared page with other users is now easier than ever.
Public pages
A Public Pages Gallery of all the pages which Pageflakes users have published.

Check out the new site!

Ugenie unlocks hidden savings

2006-11-02T01:15:00.002+01:00

TechCrunch today profiled a new comparison shopping site called Ugenie. What makes Ugenie different from most (all?) other similar sites is that the service not only finds the best price on a single item but also the best total price on any bundle of books, CDs, DVDs or games that you happen to be interested in.

Ugenie finds the best bottom-line prices for you, taking into account shipping costs, taxes and discounts. What's more, the service also takes into account that sometimes it's cheaper to pay all items from one merchant but in other cases it's cheaper to spread an order across several shops. If you think about the number of possible combinations to buy, say, five items from 35 shops, that's quickly becoming pretty complicated. And remember that in addition to the plain item prices, Ugenie also needs to take into account shipping costs, which can depend on various factors like the number of items, the order price and the order weight, or a combination thereof. The fact that taxes can depend on the location of the shop as well as the location of the customer doesn't make it easier.

Why am I writing about Ugenie? Because I really like the feature described above, because it's a cool service and because I remain interested in the comparison shopping space ever since co-founding comparison shopping site DealPilot.com (formerly called Acses) in 1997. But also because I couldn't resist telling the world that we invented the "best price for a bundle of items" feature back in 1998. ;-)

Here's the proof:

What you're seeing here is the "Comparison Shopping Cart" (that's how we coined it) of a user who's looking for a book, a movie (no, not a DVD, a VHS cassette!) and a CD. If the user scrolls down he'd see a list of all offers, taking into account all those factors described above.

Don't worry guys, we didn't patent it. Good luck with Ugenie!

Pete is now a believer, Mike coming soon

2006-10-03T17:09:00.001+02:00

When we launched Pageflakes, two of the Top Five Web 2.0 bloggers - Mike Arrington from TechCrunch and Pete Cashmore from Mashable - were very sceptical about Pageflakes. They thought we were too late and also questioned the viability of the whole AJAX startpage model.

We took up the challenge, and in some blog comments I wrote that one of my goals for 2006 is to convince these two chaps that Pageflakes is the Next Big Thing. I guess we're not that far yet, but we already have a triumph to celebrate. See what Pete blogged yesterday:

Pageflakes - I was dead wrong about Pageflakes. When the product was heading for launch, I told co-founder Christoph Janz that the start page market was already too crowded. As it turns out, Pageflakes is now one of the top ajax homepages, putting your feeds, videos and pictures together on a collection of tabbed pages. Christoph also (wisely) ignored me when I said I didn’t like the name - I seem to remember that SoleSite was the other option.

We still have 89 days left to convince Mike, too. Stay tuned!

The third generation of Internet usage

2006-09-13T22:53:00.001+02:00

Richard MacManus started an interview series on Read/WriteWeb. In the first one he asked Judy Gibbons of Accel about her thoughts on the "next generation web". Read it here.

Richard asked Judy for a few examples of companies that are under-hyped. Judy's answer:

Personal home pages like Pageflakes & Netvibes. These represent the third generation of Internet usage: first portals because there was little content and it was hard to find; second search because there was an ever increasing amount of content if you could only track it down; now personalized 'pull' home pages, because most sophisticated users know what content and apps they want to check into every day - and they want these brought to them to improve productivity.

While we can't complain about not getting enough attention, I do completely agree with Judy that most people haven't yet fully realized the impact which startpages like Pageflakes and Netvibes can have in the future. Currently both Pageflakes and Netvibes appeal mainly to early adopters like you and me – TechCrunch readers who manage their bookmarks with Del.icio.us, upload their photos at Flickr and use a bunch of other Web 2.0 services which 90% of the general population never heard of.

But what you see on sites like Pageflakes today is a mere glimpse of what they can offer in the future (stay tuned!). As they cover more and more parts of users' digital lives, offer access to an ever increasing variety of mainstream services and become easier to use for casual Internet users, they will indeed be able to represent the "third generation of Internet usage", as Judy put it. If you will, companies like Pageflakes strive to become for Web 2.0 what AOL and Yahoo were for Web 0.5 and what Google is for Web 1.0.

Long time no blog

2006-08-25T01:32:00.000+02:00

I warned you in my very first posting that I'm lazy about writing and that I didn't know how frequently I would post something. But four months without a posting, I didn't know that I'd be that bad! I probably chose the worst possible timing for starting a blog, since I started it around the same time when we founded Pageflakes.

Trying to become the #1 startpage in the world doesn't leave you a lot of time for anything else. :-) But I should at least give you a little update on what's been keeping me so busy:

Hari K. Gottipati of O'Reilly and Barbara Krasnoff of InformationWeek just picked Pageflakes as the Ajax king in the "webtop" category - ahead of Google and Microsoft. Read the story here and here (And after that, digg it!)
About two weeks ago we released our all-new RSS reader. The new version lets you read all your favorite blogs and needs feeds in one window and offers various different views to meet everyone's individual reading habit.
You can now customize your page even more by choosing from different color schemes and changing the number of columns.
Maybe the coolest of all features, we've recently added the ability to share pages with selected friends as well as to make pages public.
In addition we've added numerous flakes, bringing the flake count close to 100. For example, you can now read and write emails from your startpage with Mail Flake; watch videos with Metacafe Flake, Revver Flake and YouTube Flake; keep track of your social network with openBC Flake, and so much more. Check them out in our Flake Gallery.

Despite these new features, please keep in mind that we're still in beta and that we haven't even delivered 5% of what we plan for the future. Back to work - see you at my next posting, presumably around Christmas! ;-)

The Hottest Web 2.0 Betas

2006-04-06T01:26:00.001+02:00

The "Museum of Modern Betas", a site that is dedicated to keeping track of all those new Web 2.0 apps that are popping up every day, added a great resource to its site: The hottest betas in the webosphere. The list is based on the number of bookmarks at del.icio.us added within the last 7 days, which is a really interesting parameter. Pretty interesting for everyone who tries to discover successful startups before everyone else does (VCs, journalists,...).

Pageflakes wins Web 2.0 Award

2006-03-31T03:29:00.001+02:00

Quoting from Ole's blog:

Yes, we do know that there are quite a few awards out there. Yes, we do also know that some of them are not very well researched and show little depth. However, SEOmoz.org has certainly raised the bar in terms of depth and research quality. Over the past few months they have analized hundreds of Web 2.0 sites - and Pageflakes has won the award for best Start Page! Google personalized pages came second, live.com (Microsoft) came third. You will find a detailed list and all the winners (and runners-up) at http://web2.0awards.org/.
Thanks to Kat Ortland who has been the driving force behind the research. We hope that you enjoy Pageflakes as much as she does.

Pageflakes Server Problem

2006-03-13T16:53:00.001+01:00

Some famous people lend their names (which for some reason always start with an "M") to laws which we all love (Moore, Metcalfe). And then there are guys like Murphy.

To make a long story short, due to Murphy's Law and an insane amount of bad luck (what is the probability of two HD crashes within two days?), Pageflakes has been down or very slow for most of the past 48 hours. Needless to say, we're working like crazy to bring the site back.

We've very sorry for the inconvenience. Thank you for your understanding and your patience!

Dream job for a Web savvy student

2006-03-01T03:06:00.001+01:00

Christian Leybold of BV Capital just posted a job opening to his blog. He's looking for someone to help him research young Internet companies. If you're serious about Web 2.0, it basically means you're getting paid for what you're doing the whole day (and maybe the whole night too) anyway. If you think you might fit the requirements, go ahead and apply. I'm sure you'll like it.

ZDNet reviews AJAX desktops

2006-03-01T00:36:00.001+01:00

ZDNet's Richard MacManus reviews the AJAX desktop space. About Pageflakes he says:

Just released earlier this month, but potentially Pageflakes will be the most open of all the AJAX homepages. It offers standard modules (which it calls "flakes") like blogs, news, search, note, Flickr, Del.icio.us. There are more modules in development by Pageflakes, third-party developers and "content partners". It's developer page lists a broad range of options for developers to build modules, so this is a promising start by Pageflakes. [...]
Among the smaller companies, Pageflakes seems to be the most promising with its API support. [...]

He also writes about the same topic on his (must-read) ReadWriteWeb blog. Among other things, he has a look at the Alexa traffic charts of the different players. One of his interesting observations is this:

Update: A source at Microsoft tells me that the Live.com figure on Alexa may include mail.live.com, which gets a lot of traffic. If that's the case, take the following paragraph with a grain of salt...

I recently noticed that Live.com, while unsurprisingly having much more traffic than the start-ups, isn't bookmarked more frequently than Netvibes and Pageflakes on Del.icio.us. I was wondering if Live.com may have a lot of traffic (very easy to achieve for Microsoft) but few real users who actually bookmark the site and come back? Richard's observation might be an explanation for the discrepancy between the Alexa numbers and the Del.icio.us numbers. Maybe Del.icio.us bookmarks are a better proxy to guesstimate another site's user base than Alexa after all?

New Visitors vs. Returning Visitors

2006-02-16T04:13:00.001+01:00

cIf you have a website or even run an Internet startup, you should pay a lot of attention to your new visitors vs. returning visitors ratio. After all, you want to make sure that you're able to retain your customers. If you're fortunate enough to have a Google Analytics account, you won't overlook this parameter as it is shown on the first page of this absolutely awesome (and free) traffic analyzer. But what percentage of returning visits should you strive for? If you have no answer to that question, you may not able to draw any conclusions from the numbers.

Is 100% a good value? Of course not. It means you're not acquiring any new visitors. 0%? Not good either, since you're not able to retain your visitors in that case. So the answer must be somewhere between >0% and <100%. If this sounds like a non-statement to you, are you sure that you wouldn't have instinctively answered "as high as possible", asked about the optimal percentage of return visits? :)

To be honest, I don't know the correct answer to that question either (but I will look into it, and if you run a website maybe you should too!). In fact, there's not one single correct answer, as it depends on several factors such as "how often does a good customer of your site visit the site per week?". And these factors differ for different businesses.

Maybe the question is rather academic (but I still find it interesting). Common sense tells you that you must look at several parameters to draw good conclusions. If you look at your overall traffic stats, you should be able to tell if a rising return visit ratio is a sign of increasing customer retention or just a sign of sluggish new user acquisition.

"Online Ajax 'desktops' try to change the rules of the game"

2006-02-13T00:11:00.001+01:00

ZDNet has a really neat introduction into the AJAX Desktop space:

Online Ajax "desktops" try to change the rules of the game

Written by Dion Hinchcliffe, the article lists some of the reasons why AJAX Desktops are so compelling. And of course I'm happy that just a week after our Beta Launch, Pageflakes is already recognized as "one of the best offerings" by a proven Web 2.0 expert.

New Pageflakes feature: Multiple pages

2006-02-10T16:56:00.001+01:00

Did you notice that too? If you add some flakes and feeds, the page quickly beomes pretty crowded. One page simply doesn't offer enough space to accommodate all those useful flakes and feeds. The obvious answer: Let users have multiple pages.

Thanks to out extraordinary development team we just added this feature, and I think it's really neat. For example, you can create one page related to your job, another one for your family and yet another one for your hobby. Play around with it a little, I'm sure you'll like it!

BTW, we also added a new Map Flake based on MSN Map. Check it out!

As always, feedback is greatly appreciated.

Pageflakes Releases Public Beta

2006-02-07T22:00:00.001+01:00

We're thrilled to announce the release of our Public Beta! Over the past weeks, we fixed many bugs and glitches, implemented numerous improvements, added support for Firefox and created a number of really nice flakes. Thanks to all users and developers who provided us with their valuable feedback!

Pageflakes now features:

Address Book: Manage your contacts right from your personal startpage that you can access from anywhere.
Price Comparison: Start price comparisons using a variety of different comparison shopping engines like Shopping.com and mySimon. Also features price comparison engines from the UK and Germany.
Flickr: This one can make your page look beautiful. Select photos by tag, date or Flickr user.
Alexa Traffic: Keep an eye on the traffic of up to five sites.
Web Search: Start Web searches using Google, Yahoo, MSN or Ask.com. Look for Web pages, images, news or Usenet discussions.
Dictionary: Title says it!
Note: A simple notepad, like a digital version of Post-it® notes.
To-Do-List: You can set up multiple lists and tasks and receive reminders by email. Really helps you to get things done.
GMail: Keep track on incoming mails to your GMail account.
Become.com Shopping Search: Start shopping searches using Become.com.
Movie Find: Quick access to the Internet Movie Database (IMDB) and RottenTomatoes.com.
What’s Next on BBC: For our visitors from the UK.
Zoho Writer Docs: Access your Zoho Writer documents right from Pageflakes.
Yahoo! Weather: Enter your ZIP code and get the current local weather plus a forecast.
Del.icio.us: Your Del.icio.us bookmarks on Pageflakes.
SMS: Send a free text message!

...and the list goes on.

In addition to that, of course you can also subscribe to news feeds and blogs. This is implemented in a very simple way so far, but a full-fledged RSS reader is coming soon.

We hope you enjoy the site! If you like it, recommend it to your friends. When you check out the site, please bear in mind that this is still a Beta Version. So, please forgive any inconveniences, and let us know if you experience any bugs.

OK, I gotta go back to work. Many new features and improvements are under way. :-)

eHub Interviews Pageflakes

2006-02-07T02:48:00.001+01:00

Read it here

FON + Skype + Netgear = Trouble for BigTelco

2006-02-06T02:52:00.001+01:00

Skype announced that it invests in FON, the P2P WiFi company I blogged about earlier. Add to this new PC-less Skype phones from Netgear, Creative and others (see a posting of Christian Leybold from BV Capital) and you have the ingredients for some major trouble for the traditional telco business.

Of course, this is not new. Skype alone is an incredibly disruptive force. But the flood of new products and services centered around Skype shows just how strong the creative destruction is which Skype has triggered. I'm not saying that the big telcos are doomed. But they must find new cash cows - selling long-distance minutes at high prices will become increasingly difficult.

I'm up for the challenge, Mike! :-)

2006-01-31T01:25:00.001+01:00

I already knew that Mike Arrington is very sceptical about AJAX desktops like Pageflakes.

Today I learned that he is similarly sceptical about online calendars like CalendarHub:

Ajax calendars are faily commonplace now (they are kissing cousins to Ajax home pages as far as I’m concerned) and seem to be breeding just as prolifically.

So, one of the most influential persons from the Web 2.0 world basically says that the two startups I'm involved with are doomed.

What should I say? Maybe just this: I'm up for the challenge, Mike! :-)

P.S.: I know that Mike wishes every startup success, so I know that while he fears we may fail he doesn't hope so.

Pageflakes nearing launch

2006-01-25T04:16:00.001+01:00

We’re getting closer to our Public Beta in large steps. Here’s a little update:

Pageflakes can now be viewed with Firefox and Opera. You might still experience a bug though. Please forbear with us – we’re working hard to offer 100% Firefox, Opera and Safari support ASAP. It won’t take long until we’re done.
We created a really cool Address Book Flake. We tried to keep it simple (in a 37signals kind of way) and I’m very happy with the result. We will add some more very useful features to this Flake in the future (e.g. import/export and printing of contacts), but we’ll make sure that usability won’t suffer. Check it out!
Another really cool new module is our To-Do-List Flake. It allows you to manage multiple To-Do-Lists, set due times and receive email reminders. When a task is done, tick the checkbox and it’ll be stroked-through. Hit “delete” and it will be removed completely. Simple! This comes very handy for people like me who lose everything they write on paper and who’re thus trying to put every bit of information online.
Thanks to our fantastic Community Developers, we’ve been able to add several applications from independent developers already, just five weeks after the Developer Release: My personal favourites include the Del.icio.us Flake, the Movie Finder Flake and the Bushisms Flake, but be sure to try and enjoy them all. You’ll find them under “Add Content”.
Together with the folks over at AdventNet Inc., we created a little module that lets you access your Zoho Writer documents right from your personal startpage. Pretty handy. Thanks, guys!
Many glitches fixed, but still some to fix before we can launch the site big.

Many new exciting flakes are in the works – by our own developer team as well as by Community Developers and companies we’ve partnered with. So, stay tuned!

If you check out the site, please bear in mind that we’re not in Public Beta yet. So, please forgive any inconveniences, and let us know what you like and what you don’t like.

Pandora's Box

2006-01-22T03:40:00.001+01:00

Most readers probably know Pandora, but maybe there are still some who don't. Pandora is a wonderful music service that lets you listen to a music selection tailored to your taste. You start by entering the name of a band or a title that you like. Pandora then starts playing songs of a similar style. You can rate any song you hear to educate Pandora about your taste, so over the time the selection becomes better and better.

You can read a little bit about the underlying magic here. I assume in addition to the results from The Music Genome Project they utilize collaborative filtering (like Amazon's "if you like this book, you may also like these books" feature) so that the service will automatically become better as more users use it. I still don't know exactly how it works, but it seems to work pretty well. I like the majority of the songs suggested by Pandora and stumbled on great music by bands I never heard of before. So either it works, or I'm such a philistine that you could play any song to me and I'll like it.

In any case you should try it. Amazingly, it's even free.

$22,000,000 per employee

2006-01-05T02:24:00.001+01:00

Yesterday Piper Jaffray rose its price target for Google to $600, reminding me of Henry Blodget's famous Amazon.com recommendation in the dot-com frenzy days. At today's close of $445.24, Google's market cap is about $131.6B, with an enterprise value of about $121.0B.

Divide that by 5,500 employees (5,000 as of September 30, 2005 - the rest is just a guess), and you get $22M for every employee. Not bad! I'm wondering if any public company ever achieved a higher value per employee. Does this mean that Google is overvalued? No. Maybe it is, maybe it's not - I don't know.

"Want to Go Office-Free?"

2005-12-20T23:39:00.001+01:00

This is what AP Business Writer Allison Linn was asking herself. To get an answer, she decided to spend one week relying as much as possible on free Web services for everyday business tasks.

The result of her experiment:

For now at least, Microsoft is right -- these challengers will complement, not replace, my Microsoft Office software.

I think she's right. MS Office is such a large and powerful suite of applications, and some applications lend themselves better to being webified than others. For example, despite a good Web-based spreadsheet application like Num Sum, I won't trash Excel anytime soon. (This doesn't mean that Num Sum isn't perfectly suitable for a large number of use cases. It may also be a good alternative for occasional users or people from developing countries who don't want to spend money on Excel.)

For a counter-example, I think calendar software is an application type which is perfect for webifying. I can't think of anything which a desktop calendar can do which an online calendar can't, and the advantages of turning your calendar online are obvious. So maybe it's just consequent that my favorite quote from the article is also about online calendars:

My overall favorite turned out to be CalendarHub, which easily imported four years worth of calendar data into a pleasing interface and -- like several out there -- offered handy e-mail reminders of upcoming events.

Seems like she agrees with Dion Hinchcliffe, who named CalendarHub as the best Web 2.0 application of 2005 in the calendar category. Another interesting thought I stumbled upon:

Also, although it is nice in theory to be able to access data online, in practice it often took longer to log on to different applications every time I needed something, rather than just opening a file on my desktop.

That's right, Mrs. Linn. This is one of the reasons we're creating Pageflakes. Our plan is that some time in the not-so-distant future, Pageflakes will allow you to access all your applications and all your data conveniently from one page. When you can carry your applications to the Web, why leave your desktop behind?

Full Disclosure: I'm affiliated with CalendarHub and Pageflakes.
Promise: Less self-promotion in my next posting. ;-)

The Whole Web at Your Fingertips: Introducing Pageflakes.

2005-12-19T15:44:00.001+01:00

I’m exceedingly happy to announce Pageflakes, my new startup.

Pageflakes will start as a personalized startpage (a.k.a. AJAX desktop) that allows you to read blogs and other RSS/Atom feeds, check your email, get the latest sports news and stock quotes, start Web searches and use services like Del.icio.us or Flickr, all conveniently accessible from any PC and from one page. I’m sure there are at least 5-10 sites that you check every single day, in fact probably several times a day. Pageflakes saves you some of this effort by aggregating the content that’s relevant for you into one nice page. A bit like an RSS aggregator, only that it’s not limited to RSS feeds.

But that’s only the beginning. Over time, we want Pageflakes to evolve into THE entry point to your digital life, allowing you to do everything from managing to-do lists to watching Internet TV to checking your voice mailbox and much more. A suitable name for that might be Digital Life Aggregator (similar to the term “Digital Lifestyle Aggregator”, which AFAIK was coined by Marc Canter) or Next Generation Internet Services Platform (a term recently used by Microsoft’s Ray Ozzie when talking about Microsoft’s new Live.com initiative).

If that sounds familiar to you, the idea of a personalized startpage has been around for years. Excite and Yahoo tried it several years ago, but we think it takes new technologies and approaches like AJAX, RSS and APIs and other Web 2.0 ideas for this concept to really take-off. Thanks to AJAX you’ll get a desktop-like experience. Thanks to widespread content syndication you’ll be able to add an incredible variety of content and services to your personal page. To make the Web 2.0 buzzword compliance, we also address The Long Tail of software by allowing developers to contribute their applications to Pageflakes.

We just launched our “Developer Release”, so right now we’re not even in alpha yet. However, if you go to our site you can already see some prototype modules (“flakes”) and enjoy some AJAX Drag & Drop goodness.

When you look at the site, please don't forget that we’re pre-alpha. 99% of the functionality is still missing, the design implementation is not perfect yet and there are still some glitches. Basically we're at a point where others put up a teaser page. Once we target the general public, we will also support Firefox, of course.

Finally, if there’s anything that I’m more excited about than the idea itself, it’s our team. It includes someone who co-founded Alando.de (which was acquired by eBay) and an exceptional team of oustanding software engineers from Bangladesh. I think this posting is too long already, so I’ll talk some more about my partners on a later occasion.

Now have a look at Pageflakes, subscribe to the launch notification and let me know what you think!

P.S.: “Are you kidding me? Do you really want to compete with mighty Microsoft and Google?” Well, in a way we will. In the beginning, Pageflakes, Live.com and Google’s Personalized Homepage will look pretty similar. But over time, we expect the three to develop into somewhat different directions. We’ve got a hell of a lot of cool ideas on how we’re going to improve and extend Pageflakes in the future (and I’m sure so do the other teams – but we probably don’t have the same plans). In addition, our advantage as a small startup is that we’re quick, that we can flexibly react to the needs of our users and that we’re totally focused on what we’re doing. Finally, we’re not saying that we will drive Live.com or Google/IG out of business. There’s space for more than one player in this emerging market, and we’re satisfied if we get a sizeable chunk of it.

The Best Web 2.0 Software of 2005

2005-12-11T02:07:00.001+01:00

Dion Hinchcliffe put together a great list of the best Web 2.0 applications released in 2005. Interestingly, only one of about 30 applications has been developed by a big corporation (Microsoft's Start.com) while the rest has been developed by start-ups - some of them tiny one- or two-person companies. As far as Web 2.0 is concerned, the greatest innovations still come from start-ups (although the GYM is close, as demonstrated with software like Google Earth and the new Yahoo! Mail).

So far, two from the list have been acquired by one of the big boys: Flickr and Del.icio.us. I'm sure that in a year from now, a couple of others from the list will have been snapped up. My best guesses are Writely and Netvibes.

Congrats to Sam (Writely), Tariq (Netvibes), Ian (Openomy), Jason (Writeboard and Ta-Da-List) and to everyone else who's working on the next generation of Internet software.

Last but not least some sites I'd suggest to add:

CalendarHub (how about adding a "calendars" category, Dion?)
TailRank (Blog Filters)
Reddit (Peer Production)
NumSum (maybe add a Web Excel category?)

My favorite quote on the Ya.hoo.licio.us acquisition

2005-12-09T23:07:00.001+01:00

I still can't believe Yahoo paid around $100 for my bookmark list.

From Greg Yardley

Web 2.0 & VC 2.0

2005-12-05T14:40:00.001+01:00

Clarence Wooten from Venturepreneur Partners wrote an interesting piece titled "Less Venture Capital: The New Model" in which he applies 37signals well-known "Less is Better" principle to Venture Capital.

There are several other interesting articles on Venturepreneur's site. In "Strategic Approach: Building value not excess" he asks:

Is it taboo to build a company with the intention of selling it early?

It sounds disillusioning and I think he may underestimate the negative effects which a "build to flip" attitude can have on employees and the whole company culture. The team needs a more imaginative vision than "getting acquired" (although I'm sure that Clarence would agree with that).

In any case there's truth in what he says. From a founder's perspective I always found it questionable to chase the IPO dream if it means giving up the opportunity of getting acquired at the right price. There can be a conflict of interest between the VC and the entrepreneur with regard to the exit preference (Stefan wrote his diploma thesis about this topic, got to read it soo), since the former in contrast to the latter has a diversified portfolio and possibly a different ROI expectation and a different time horizon.

For a VC, one home run and nineteen zombies might be a good yield on balance, but a founder might prefer a 30% chance of achieving a nice acquisition over a 5% chance of going public even if the latter has the higher expected value. The reason is the diminishing marginal utility of very large amounts of money for an individual. It's for a kind of similar reason that you buy an insurance although it has a negative expected value.

Gosh! I started this post with Web 2.0 and ended it with buying an insurance. Enough disillusionment for today. Oh, by the way, that was just my professional opinion. My heart says that we'll beat the GYM with my new startup and become the next Microsoft. ;-)

BookBurro - tough times ahead for Amazon.com?

2005-12-01T15:13:00.001+01:00

BookBurro is a smart Firefox plug-in created by Jesse Andrews that lets you find the best book deals while you shop. When you're looking at a book page on a site like Amazon.com or Barnesandnoble.com, a little window magically appears and tells you the prices for that particular book from about 10 online bookstores. Comparing book prices doesn't get much easier or more convenient than this!

At first sight, one could think that a tool like this must cause considerable headaches to Amazon.com. After all it allows customers to use Amazon.com's unbeaten site for browsing but proceed to another retailer to make the purchase with literally one mouse click. While comparison shopping sites like Shopping.com and Shopzilla are very popular and while I think they do contribute to limiting the pricing power of brand name online shops, the value of Amazon.com's brand shouldn't be underestimated.

During the first wave of comparison shopping engines from 1998-1999, some analysts predicted that online retailers would never be able to make a decent profit because the radical removement of friction would effectively turn online shopping into a commodity market. They underestimated people's deep desire for convenience and the level of trust associated with Amazon.com.

As far as BookBurro is concerned, it's interesting to note that the concept of on-the-fly price comparison has been around for years but never really took off. I know what I'm talking about, as my startup DealPilot.com launched a similar product, a browser companion toolbar called DealPilot Express, back in 1999. It never became as successful as the website, so Shopping.com (which acquired DealPilot.com) buried it after a while. RUSure, ClickTheButton and all other competitors of us from that time met the same fate.

BookBurro is easy to install, unobtrusive and seems to work very well. It's definitely better than the first breed of such tools. It'll be interesting to see if they have success.

Thanks to Library Stuff for the pointer.

43 Folders on Group Scheduling

2005-11-29T19:34:00.001+01:00

43 Folders reports on a funny lo-fi way to find the best date for an event based on several people’s schedules:

By passing around emails with an ASCII, monotype text representation of the possible dates and times, each person uses a symbol to indicate their preference and availability.

It's a clever idea, but of course a MUCH more convenient way is to set up a free group calendar at CalendarHub. (Full Disclosure: I'm affiliated with CalendarHub.)

Happy Birthday, Windows!

2005-11-28T01:43:00.000+01:00

German computer magazine CHIP has a story on Windows' 20th anniversary. Windows 1.0 was scheduled to be released in June 1984 but didn't make it into the stores until November 1985. The story is available in German only, but if you feel like getting sentimental, here's a screenshot tour.

The funny thing is that many of the Web 2.0 folks won't get teary-eyed here because they're too young to remember things like 20 MB hard drives, acoustic couplers and monochrome monitors. Ian Sefferman of Openomy (about which I wrote a few days ago) is just 21, for example, and Omar Al Zabir, my ingenious partner at Pagefla...ooops, I almost revealed the name of my new startup!...is just 23 years old, too. ("Revealed" in a "Ray Ozzie memo leaked" kind of way.)

OK, folks of the generation Web 2.0, at least have a look at this:

Guess what these funny black squares are? No, no gramophone records. Your dad or elder brother used to call them "floppy disks". These 5 1/4 inch floppies here stored 360-1200 KB, but if that sounds a little small for your MP3 and DivX collection, remember that your dad and your elder brother were exceedingly proud when they finally got a floppy drive, as that allowed them to throw away their datasette recorder.

The PC revolution of the past 20 years never fails to excite me. And as many others, I keep wondering if Moore's Law will still work in the next 20 years to come.

P2P WiFi

2005-11-26T02:16:00.001+01:00

Via Roland Tanglao: FON allows users to share their WiFi networks with other users. They're launching in Spain, but according to Joi Ito they plan to push out worldwide.

The idea is interesting: If you have DSL, most of the time you're using only a tiny fraction of your available bandwidth. Why not give some of your extra bandwidth to that guy sitting in the café next door who is going online via an expensive UMTS connection? If you think of VoIP (read: Skype) via WLAN, it's getting even more interesting.

In Germany, sofanetworks is trying the same. They have a slightly different focus though, as they also target to neighbours who want to share their Internet connection using a WLAN. So they not only want to save you costs while you're on the road, they even want to let you save your home DSL connection.

Will FON and/or sofanetworks succeed? I'm still skeptical. One reason is security. What if the people who I share my Internet connection with will download illegal content from the Web? I'm sure both companies address this concern. But will users take on the hassle of learning more about the security situation or will they just stay away from the offer? The upside, after all, is rather limited: A share of the revenues generated with the user's WiFi (which I assume will be a few bucks per month in most cases), plus the promise of being part of a movement which kicks the big telcos in their pants.

Another reason why I'm not convinced yet is that they need a large critical mass of customers in order to successfully match connection sharers with connection users. At least, FON's founder Martin Varsavsky has experience with that: Before founding FON, he founded telephone company Jazztel and Internet portal Ya.com in Spain, both of which became large companies.

BTW, are you a "Bill" or a "Linus"? At FON, you can decide if you want to become a "Bill" or a "Linus". Bills get 50% of the revenues generated through their WiFis. Linuses, on the other hand, don't get the revenue share but in exchange they get free roaming among the FON network.

YubNub and the power of Google

2005-11-25T00:15:00.001+01:00

YubNub is a command line interface for the Web that allows you to start all kinds of Web queries by typing a command, e.g. "g" for Google, followed by the parameter of your choice. Typing "g c# UML" (without the quotation marks), for example, will yield a Google search for the search term c# UML.

Other popular commands include "wp" for Wikipedia, "gnews" for Google News, "tec" for technorati and "weather" (followed by a ZIP code) for weather information from The Weather Channel. In the same way you can use hundreds of other commands that have been created by YubNub's user community. Yahoo has a similar feature called Yahoo Shortcuts and Google lets you do searches like 10+5 or $ 10 euro, but none of these offers you nearly as many different commands as YubNub.

Somehow I like the idea. Since I stumbled upon the site a few months ago, I've been visiting it every now and then. I didn't really "adopt" it yet though. Maybe many others feel similar. Are we spoilt by GUIs so that we don't want to remember any of those commands? Or is Google simply too good, not leaving any space for a service like this? I think the latter is a problem for many startups which try to do anything related to helping people find information on the Web. Google works so awfully well, it's hard to make people remember an additional URL. If you search any kind of information, chances are you'll find it quickly by starting your search at Google.

As Google quickly turned from David to Goliath and I always sympathize with the Davids, I still keep my fingers crossed for YubNub, of course.

Openomy - building the file system for Web 2.0

2005-11-24T00:16:00.001+01:00

Openomy wants to become for the Web what FAT was for MS-DOS and NTFS is for Windows. No idea what I'm talking of? (I don't know the nerd ratio of my readership.) Then here's a better description, taken from Openomy's site:

Openomy is an online file system. You can store files on Openomy and access them from any computer. Openomy organizes files and users via tags (as opposed to folders). You can choose to keep your files guarded by Openomy, or allow certain outside applications (of your choice) to do new and interesting things with your data.

In case you're still not sure why this is a great idea, consider this: At the moment, your Writely files are stored on Writely's servers, your Num Sum files are stored on Num Sum's servers and your Basecamp files are stored on Basecamp's servers. (If you're not using any of these applications, please read this posting again in two years. Chances are you'll be using one of these services, or a similar one, by then. BTW, why not send yourself a reminder in two years to see if my fortune-telling is right?)

So, do you have a separate hard drive for Word, Excel and Powerpoint? No? Then I'm not sure if it makes sense to have a separate file system and storage server for each Web-based application.

I think Openomy is a really, really smart idea. I also think a viable business can be built around it. To enter the market I think they should build one really cool application that is closely tied with Openomy and give it away for free or for as little money as possible. The most obvious application, of course, is to address the terribly underserved market for online storage and remote backup. And while not offering a perfect solution for that need yet, they're already beginning to do just that.

Not just rounded corners and pastel colors

2005-11-23T22:24:00.001+01:00

Adam Green says "Web 2.0 is just like Web 1.0 but with rounded corners and pastel colors". Hilarious.

Just in case it's not a joke: I disagree, of course. Although there's legitimate criticism around the term - and IMHO the definiton is still a work in progress - it's much more.

10 Companies Michael Arrington would like to profile (but don't exist)

2005-11-22T16:27:00.001+01:00

Michael Arrington from TechCrunch published a terrific list of 10 companies he'd like to profile but don't exist. Usually when you find a list of business ideas somewhere it's either "get rich quick" spam or a suggestion to start your own pizza delivery service. This one is different.

Every single one of these ideas is highly interesting. Some of them have the potential to become huge businesses (e.g. "Online File Storage" and "Open Source Yellow Pages"). Some of them are smaller but are easier to build and could still support a very viable and profitable business. "Blog/website Email Lists" is one of those.

This is one of the most insightful and valuable blog postings I read in a while - thanks, Michael.

Check it out. If you're building one of these businesses, feel free to drop me a line to see if I can help you in any way.

CalendarHub launches

2005-11-22T10:18:00.001+01:00

CalendarHub went from invitation-only beta into public beta today. In my opinion, which admittedly is biased because I’m an angel investor at the company, CalendarHub is the best Ajax calendar on the Web. Let me give you a quick elevator pitch.

CalendarHub allows you to create a calendar that you can access from any PC with an Internet connection. If you like, you can share your calendar with others, or publish it on the Web. The site has a sleek Ajax-powered user interface which I’m sure you’ll like.

You can use CalendarHub in a number of ways:

As an individual
Build a calendar for your own private use. Create reminders for birthdays, bills, leisure activities....anything you want. If you like, get reminders by email or SMS. You can also search published calendars for events and add them to your own calendar. Creating a shared calendar for your family is a snap as well.

As a business
Create a team calendar which every team member can access. In addition, everyone from the team can have his or her personal calendar, of course. The cool thing is that you can subscribe to other calendars. So if an employee subscribes to the team calendar, all events from the team calendar are fed into his personal calendar.

As a group/organization
Create a calendar for your football team, your school grade, your community organization...whatever social activities you’re involved in. Everyone from the group can subscribe to an RSS feed of the group calendar, so they’re automatically notified of new events or changes.

As a theater, cinema, club
Publish a calendar on the Web to announce events. Build a subscriber base of clients who subscribe to the RSS feed and easily notify them of last-minute ticket opportunities simply by adding the respective event to your calendar.

This an incomplete listing of CalendarHub’s features (and much, much more is in the making). But I promised an elevator pitch and I guess we already reached the top floor. :-)

Please have a look at CalendarHub and let me know what you think. Feedback is greatly appreciated.

Congrats to Scott Mace and Barry Welch who created CalendarHub and did an awesome job. Keep up the good work!

10 Over 100

2005-11-20T17:28:00.001+01:00

James Hong and Josh Blumenstock, creators of the popular site HOTorNOT, started a terrific initiative:

At 10over100.org, people make a pledge to give 10% of whatever they make over $100,000 each year to charity.

I love that idea. If the governments of the rich countries aren't willing to cure the world of extreme poverty - although IMO it would be possible - then private persons must stand up and fill the gap. I would like something like "2 over 20" even more, as I think that almost everyone in the rich countries would be able to afford spending 2% to fight extreme poverty. But 10over100 might be more realistic.

The question of efficacy and efficiency of foreign aid pops up, of course. But for now let's work with the (admittedly simplistic) assumption that money from the rich countries can prevent people in the developing countries from starving or dying from easily preventable diseases. I know things are a bit more complicated in reality and I may get back to that discussion.

I, for one, pledged "10 over 0", i.e. 10% of my income. My money will go to Jeffrey Sachs' Millennium Promise project, which uses modern science to make poverty history, one village at a time. I encourage everyone to join me in this greatest challenge of our generation.

Anyone creating „The Blog Street Journal“?

2005-11-18T23:18:00.001+01:00

More and more of what I read every day is delivered digitally (blogs, newspaper sites). I’m sure it’s the same for most of you. Heck, I even cancelled the subscription of my daily. It’s old news when I’m getting it anyway, and for in-depth stories I have my weeklies and monthlies. And of course for many topics I’m interested in, the blogosphere is where the action is anyway.

Still, reading a newspaper on paper is a more pleasurable experience than reading news on screen, at least for me. If an article is more than one page long, most of the times I’ll print it. That probably won’t change until screen resolutions come much closer to print resolutions. When screens become lighter and more flexible that will help to.

What I’d love to subscribe to is a daily, printed edition of the best posts from the blogs I read. A bit like a printed Findory, but even more tailored to my interests. A smart attention engine like TailRank would be required to find out the most interesting postings from thousands of postings from hundreds of feeds. Digital on-demand printing has become cheap enough, see NewspaperDirect or this new company there.

Even if this is perfectly executed, a big question remains. Is blog content suitable for the paper format?

Lack of hyperlinks. Blogs make particularly heavy use of hyperlinking to other blogs and other resources. Not being able to go to these links with one click would be a big downside.
Human intelligence. Attention engines will be great for pre-selecting postings (getting it down from thousands to hundreds) but I don’t know if they will work well enough to get the selection down to a number of postings that fits into a newspaper.
Time lag. Do the advantages of the paper format outweigh the delay of around 24 hours on average between publishing and reading?

If anyone builds The Blog Street Journal, it will never replace real-time blog reading. It could be a great addition though. Let me know what you think!

P.S.: Somewhere in between reading blogs the usual way and The Blog Street Journal would be a service that creates a nice-looking PDF out of your favourite blog content. If the user rates how well the postings were selected, the results could become constantly better over time. The whole job of getting the content, creating the PDF and sending it to the printer could be done automatically, of course. So you would find your latest Blog Street Hourly in your printer’s output tray every hour.

P.P.S.: Even if none of these ideas ever become reality, maybe this is at least the future of newspaper delivery? Printing a newspaper and shipping it hundreds of miles to the customer, only to have the customer throw away 90% of the newspaper (because I never read the sports section, for example) doesn’t seem very clever, does it?

Meetro - location-aware IM

2005-11-18T16:36:00.001+01:00

Meetro is a location-aware social networking service with instant messenger integration. From their website:

Technically speaking, Meetro is radius and proximity based software. Untechnically speaking, it finds like-minded people around you instantly. Wherever you are. So whether you’re in-town or out of town, Meetro gets you on the town with old friends or new acquaintances.

Via Tipmonkies.

RSS => IM

2005-11-17T02:33:00.001+01:00

Found on Peter Brown's Ajax Blog:

immedi.at helps you to keep track of online information as it changes. It sends you an instant message whenever any RSS or Atom feed you want to monitor changes.

Don't use this for your whole OPML file, or an IM will pop up on your screen every few seconds. A good way to keep an eye on selected feeds that are most important to you though!

Two people challenging a $28 billion industry

2005-11-15T23:16:00.001+01:00

eHub did a nice interview with Paul Youlten, the founder of a great project called Yellowikis. Yellowikis, as Paul put it, is "the 10 month old love-child of Yellow Pages and Wikipedia".

Putting the Yellow Pages online has been tried before but I don't know if any of those projects really took off. Yellowikis' new approach makes this new attempt really promising. I hope they will succeed, especially because of their care for developing countries and their wish to help facilitate trade in those countries.

It seems like Yellowikis is operated very leanly. Asked about traffic, Paul replied:

We don’t take advertising so I didn’t pay for the stats package provided by our hosting company.

He also said:

I got an email from a management consultant that said: “Unless you are in government development, why provide business information for free?” Clearly some people still don’t get that the rules have changed. It’s quite easy for two people with $75 dollars and a few hours hard work to challenge a $28bn industry (Yellow Pages) without any ambition to make a fast buck.

I can hear those industry's people mumble "asymmetrical warfare".

A lesson in arithmetics, the German way

2005-11-15T02:51:00.001+01:00

Here's a quick test, taken from real-life here in Germany:

One political party wants to increase the VAT from 16% to 18%. Another party wants to keep it where it is. These two parties form a governing coalition.

Question: Where do they meet?

If you guessed 17%, you're wrong. Right answer: 19%.

GYM, the gorilla triplet formerly known as GMY

2005-11-14T12:59:00.001+01:00

Om Malik just coined the acronym GYM for Google, Yahoo and Microsoft (at least I read it at his blog first) and asks if you manage to not mention the GYM for a week. I think it'll be difficult. Given the resources, distribution and yes, innovative power and speed of the Big 3, the key question for most Web 2.0 startups is how they manage to compete with the GYM.

BTW, someone called the GYM GMY a year ago already but it seems that acronym didn't catch on.

My first posting

2005-11-13T16:38:00.000+01:00

So I finally started a blog. I've been tempted to do this for a pretty long time but I wasn't sure if it's a good idea:

I'm lazy about writing and I don't know if I'll feel like posting frequently.
I have no idea if anyone is interested in what I have to say.

Why did I decide to give it a try despite this poor starting position?

It's no big deal. If I don't feel like blogging any longer after five postings, that was it.
Sometimes, I really want to shout out my opinion.
Blogs are a great place for networking. I hope that the blog will help me get in touch with a lot of interesting people.
It's a good way to improve my English, especially if you are so kind to let me know my mistakes.
I'm involved with two Web 2.0 start-ups (one is here, the other one pre-launch). How can I dare to not have a blog?

OK, 'nuff disclaimer!