YouTube.  Yahoo!  Google.   Technology companies or media & advertising companies?

Very quickly being in tech on the web, unless you're building hardware or web-based application software, it's becoming pretty much the same thing. 

That's why I'm excited to be in New York....   because there are so many media and advertising folks here, it's only going to make NYC's potential to have a major impact on the web that much bigger.

But yet, despite a lot of noise, nextNY doesn't seem to be adding many digital media or interactive advertising people to its ranks...  still very tech heavy.  I feel like a lot of people on the other side of the table feel like they're just not in the same community as we are, which is a little strange to me.   

This is completely generalizing, unscientific and anecdotal, but I feel like the tech community is actually that, a community.  Tech people are just used to collaborating more.  There's more freelancing going on and so they're used to working with people from many companies, often at the same time.  Plus, anyone who has ever coded or designed anything has often depending on their network of knowledgable friends to help them out with a line or two or a rounded box here and there. 

Could you imagine agency folks e-mailing a listserv saying, "Hey, what's funnier?  A talking monkey or a talking fish?   I need to get the answer to this for a 10AM presentation to a client...  can someone help me out?" 

They might reach out to their friends about that... but other professionals?  Just doesn't seem like there's that kind of dynamic.

And on the media side, when CondeNast folks get together with their counterparts at NewsCorp, do you think their first thought is, "Hey, how can we work together?"   It's just a very competitive industry that has a zero sum approach to collaboration.

I hope I'm wrong about this... and in the coming months, you'll see some nextNY events that attempt to bring agency and media people into the fold... to talk about the future of those industries as they relate to the disruption caused by technology.   If you're in the agency or media biz, you should definitely check out nextNY.  We're not just tech people... we're digital builders, consumers, enablers, financiers, etc...   and unless we realize that we're all in this together, not a lot is going to get done.

A tech blogger I know e-mailed this to me...

"We are at the top of the cycle... Its gonna get ugly soon if past is any guide"

*shivers*

Well, that doesn't sound good....   and certainly public market gitters aren't making people feel any better either.

Is this the beginning of the end?

Let's examine the possibilities...

Bearish Case:  It is March of 2000.  This is it.  This is the beginning of the end.  Sell sell sell.

Certainly the public market is starting to hiccup.  We've given back some of the 20% equity gains we saw in the last year and there seems to be a lot of nervousness.  The housing market is slowing down  and the fear is that a slowdown in the housing market is going to ripple through the rest of the economy. 

In the first bubble, much of the overvaluation and overfunding of companies hinged on a liquid and rising public market, so when that dried up, the whole thing came crashing down like a house of cards.  So, what is supporting the current venture market?

There's a lot of acquisition activity, but it seems to come in two flavors... really big deals and really small deals.  On one hand, you have Skype, Webex, YouTube, rumors of Facebook... all in the billion dollar range.  Then, you have del.icio.us, Reddit, Writely, Flickr, MyBlogLog, JumpCut, Rojo...  all supposedly below $40 million.  Doesn't seem like there's too much in the middle... and not a lot of IPOs.  So, there does exist the possibility that 1) There isn't much else out there to buy for a billion and 2) all the little aquisitions, relative to the amount of venture money flying out the door, won't amount to a hill of beans...  hence the potential for collapse.  Or, just imagine that the average entreprenuer sells out for less this time, b/c it was easier to build without a lot of outside capital, and so all the worthwhile companies get bought out way before they have an opportunity to really create much market value, resulting in severe underdelivery of the promise.

On top of that, you have a lot of companies underpinning their business models on the online advertising market, and there's a lady known to blow on some other guy's dice once in a while. 

And, yet another argument that we've peaked is that, frankly, not a lot of these apps have gotten a heck of a lot of traction.  The fact of the matter is that, before it went free, there were still more than ten times as many paying AOL dial-up users as their were del.icio.us users.  Second life rarely gets more than 20k concurrent visitors and RSS hasn't even reached 5% of internet users yet. 

Slightly Bullish Case:  It is 1998.  This is just a blip.  We've still got a few good years left, but let's be careful about where the new dollars go and make sure we get out in time.

No reason to sound the alarm...but let's not get nuts either is what the slightly bearish case would tell you.  Thus far, the public markets haven't crashed yet and economists are pointing to a soft landing, which is generally ok for stocks.   On top of that, while I'm sure there are a lot of companies that shouldn't have gotten funded, there are few examples of really gross overfunding.  VC funds are smaller this time around, and they're funding deals that don't burn a ton of cash, unlike the Webvan's of yesteryear.

Plus, the move to online advertising is more than just an uptick that might come back down, it is a structural shift unlikely to swing back.  Print and TV are going to lose permanent share that has to come to where more consumers are spending more time and more money.  Broadband penetration is still growing, and the original MySpacers are maturing, graduating college, and going to do more and more online.  Granted, advertisers need to see good ROI and they're still not entirely comfortable with UGC, but still, the gravy train has left the station and we're all aboard.  All good signs.

Of course, we still need to be cautious, especially as VCs start picking and choosing who gets B and C rounds.  Keep in mind that VCs tend to fund for 12 months or so, give or take, and we really only started funding this Web 2.0 thing in the middle of 2005.  A handful of companies have gotten second rounds, but that wave is just flowing through, and it is often at the C round where VCs take a look at themselves and say, "This just isn't working as a business."  This is especially the case since most of these Web 2.0 companies are going to get a free pass to the B round, since the technology pretty much works.  When you fund a chip company or biotech company, after the A round, you might discover that the thing just doesn't work, but with Web Apps,  it usually works from day one.  So, what might happen is that, over the next 18 months, we'll see some apps get their plug pulled and that will cause some healthy jitters, but with the ad wind at our backs, and no dramatic housing collapse, we'll be fine.

Unrepentant Bear Case:  It is 1994.  Are you kidding?  This is just the beginning.  We haven't even come close to building all we need to build.  Deals for digital content are going to be the Netscape of Web 2.0 and we've got lots to build around that.

I think there's certainly a case for this.  I mean, frankly, if I have to wait another cycle to get ad supported episodes of the A-Team on my computer on demand, I'm going to get really impatient.  Hopefully, all of the music and tv licensing deals are open and friendly enough that they beget a whole slow of development around them in the same way that the browser opened up the internet to us.   

On top of that, how much longer can US carriers continue to stunt mobile development.  The promise of mobile, if it ever comes to fruition, could spur on a bull market in the startup space all on its own if we ever found a way to break the carrier lock.  Whether its municipal wifi, or government intervention or whatever, you have to imagine this happens sooner rather than later.

So, the case here is that there's so much left to do that there has to be continued optimism.  Online ads are still pretty irrelevant and lack engagement.  Business class web applications to compete with Office still have a way to do... and there's been little web innovation in the finance industry in Web 2.0 and even less in the healthcare information sector.

To me, when you port offline models online, once every offline company has an online presence, that's pretty much the end of innovation... and that's when Web 1.0 sort of finished up... everyone went online and that was, well, pretty much it.  Not a lot for really innovative business models.

When you start taking advantage of networks, metadata, mashups, etc...  you should increase the potential for services and business models exponentially... doing what you couldn't do offline... and now, you can do it so much more cheaply that between these two points, I would naturally expect the Web 2.0 boom to last longer than the 1.0, unless you just say that now we have less patience and more fear after the last cycle.

So where are we in this cycle?  What's your prediction?  Let's get a good conversation going by commenting and linking around.

If you want to blog your thoughts on this, tag it "boomorbust" on del.icio.us.

Are you wondering why "This is better than YouTube, teacher ratings, and contains a list of good movies, the plot to momento, the prestige plot, the saddest song ever, Charlie O'Donnell, and ask city, as well as drivers for the Sprint PPC 6700"?

...Because these are the search terms that garner me the most traffic.    Random.

Hi random searchers, I'm Charlie O'Donnell.  This is a blog.  Click here to learn more about me.  I hope you found what you were looking for.

I've been checking out outside.in and I have to figure out how to geotag my posts per post... b/c I only rarely write about Bay Ridge, but I'm often in other places in the city.

But one thing that just strikes me  is the web's insistence on using zip codes as neighborhood identifiers.   Who really knows any zipcodes besides places you live and where you work?   I've been setting up football games in Sportsvite and I have no idea what the zipcode of Riverbank State Park is, so I just throw in some garbage.  (Other than that, though... its way easier to invite my team to a season's worth of games on there than on Evite.)  A lot of local event things do this...  and I can see how an information architect would love this...  a numerical system for geocoding...  but that's not really the way people live, except for the three people who tag Bay Ridge photos in flickr with 11209.  A lot more people are using the bayridge tag.

Outside.in has mapped zipcodes to neighborhoods and so, now, I can subscribe to the Bay Ridge newsfeed.  Kudos to them to realizing that I live in a place with a name, not a number.

There

Have you ever wanted to help create a web app, but don't know how to code, like me?  :)

Well, now you can get a lasting contribution into what is sure to be one of the most popular web applications around.  *I hope*

Our consumer avatar product, Voki, which will be launching soon, allows users to upload their own backgrounds to their avatar scenes or select from a stock file.

We've populated the stock files with some of our own images taken by people in the office when they go on trips and such.  It's sort of neat to see people using your photos on their webpages with a speaking character in front of them... in a photogeek kinda way.

So, I figured I'd open it up...     If you have a photo that you wouldn't mind people using as a "stock" background for their avatar scenes in Voki, just tag it "vokiphotos" in Flickr.   Please, no shots of people, nude people, etc...  We'll use stuff that seems "backgroundy".   Nature photos, city photos, pictures of rooms... basically spaces that people would want to be...  or completely funky stuff that just looks cool even though you don't know what it is.... all acceptable.

By tagging your photos, you agree that we will be using them as part of a commercial product and you will not retain any rights whatsoever over the usage of those photos in Voki.  We will not specifically sell your photos directly... just add them to the pool of free photos available to all.

Here's what we have so far.

I've decided that, for the next week, I'm going to check TechMeme and the del.icio.us and Digg popular lists each morning, and not post on any of the news I see there... and pick a topic entirely different.  If Apple gets mentioned in any way, I won't mention Apple.

So there will be no mention of "One BILLION dollars" [puts pinky to lip] on this blog today...   

So Twitter is all the rage at SXSW and I have to say, after being totally bored with it up until I got here, I've been Twittering like a fiend.

And, because of the SXSW buzz, I'm sure some VC  who has never used it will want to throw 10 million dollars at it.

So I get it now, and I think it can be great, but I can also see going back home from SXSW and never using it again.   So, basically, it's too early to tell, but here are 5 arguments on both sides. 

Twitter rocks because...

1. Most importantly, it provides others access to me that I control.  Facebook demonstrated the importance of this over its Newsfeed blowup.  Privacy is huge.  I'm happy to give someone my Twitter name, because I can choose to stop getting their texts, and frankly, I don't much care if they still get mine.  I control their affect on my SMS inbox, which I wouldn't if I was giving away my phone number for texting.  Plus, allowing them to text me shouldn't allow them to call me... that's just braindead simple.
2. Twitter is to UPOC as del.icio.us is to Third Voice.  There was a great article written by the creator of Third Voice that talked about how seemingly small architecture changes, like foldering vs tagging, and defaulting to public vs private, made a huge impact on the ultimate fate of Third Voice and del.icio.us.  I look at Twitter the same way.  There's already a group SMSing service out there

Has there ever been a really useful web service with great features that died because the UI was too complicated.  I have a theory that users will figure something out if the promise of the product is compelling enough and the purpose of the product is clear, but the interface sucks.  True or false?

"I'm your blog reader's blog tagger's other digger's twitter friend..."

"What does that make us?"

"Absolutely nothing...which is what you're about to become."

I didn't even know it was International Women's Day today until someone told me.  I think women need an RSS feed or something, so the community of people who are interested in women can stay more up to date.   :)

To celebrate, I'm going to link to my favorite female bloggers:

danah boyd (apophenia) - I heart every word danah puts out onto the web.  Call me a fanboy, but she's thinking about our digital lives and how we reflect them on the web as much as anyone, and even if I disagree with her, which I rarely do, I respect her passion for young people.

Shri Mahesh (Almost as Good as Chocolate) - Shri was the former VP of Product for eBay and has been a great mentor and more and more, a friend.  She's a relatively newbie blogger.

Rachel Strate (Wasatch Girl) - Utah VC Rachel is finally blogging.  After appearing on MyBlogLog months and months ago, tipping me off to her dominance of the most unlikely of niches - female VC analyst in Utah - I'm glad to see she's finally taken the blogging plunge.  She also blogs over here about her exploits as a secret agent on the side... jumping out of planes and rock climbing.

Sarah Tavel (Adventurista) - More VC females...  and a nextNYer to boot!  Don't let the Rugby photo on her page fool you, though... she's won't tear your head off, especially not if you read her blog.  She knows a lot about the SaaS market, which is great for her firm... you may have heard of them... Bessemer Venture Partners.  They did this Skype thing...

Equity Private (Going Private) - My favorite anonymous blogger.  She works as a VP at some boutique private equity fund somewhere... and a recent run-in with some motor vehicles nearly did in her blogging (and her), but fan support seems to have kept her going and I'm glad, because she's whip smart and keeps me in touch with the buyout market, which I would have otherwise long since forgotten about. 

Elise Bauer (Learning Moveable Type and Simply Recipes) - Elise's MT blog basically taught me how to create havoc with my templates.  Thankfully, I've had much more success with her recipes.   She is truly a jack of all trades, as she's also very accomplished in aikido.

Joanne Wilson (Gotham Gal) - I have to admit, I've been a bit lazy with Joanne's recipes, because I got used to those cookies showing up at USV.  Now, I've got to make my own instead...  boo.  I also like her takes on parenting social network savvy kids...   because I often find myself in this conversation with a lot of people about the lines between controlling, monitoring, and just being in touch with what your kids are doing with their time.

Hmm... this post is getting too long, but I've got more...   good problem to have I guess.  Shoutouts to advertising bloggers Stephanie Rogers and Ann Handley.  I'm sure I left someone off...

When I was at the GM Pension Fund investing in venture funds, we always pushed hard on trying to raise the bar on our due diligence.  We talked to a lot of CEOs to try and figure out which venture funds were worth their names and, at the end of the day, I'm not really sure we really ever learned anything about what makes success. 

Here's the issue.... what makes a company ultimately successful is a combination of factors.... environment, product, competition, etc...     and on top of that... tracing decisions to one particular person, be it on the board, the CEO, the VC, etc... is often impossible, because ideas are iterative.  For example, we have a key part of Voki that you'll see develop post launch that started out as a meeting called by the CEO to "kick the tires" and just imagine the worst things that could happen to the product.  At first, I thought it was a little late for that, but out of that meeting came a really fantastic idea that we're all really happy with.  Who's idea was it?  Well...  we both sort of came up with it... and its been iterated upon by others in the company.  I don't think it's really traceable to one person.

I was thinking that when we sat at our board meeting looking at our marketing strategy yesterday.  Does it all stop with the CEO?  The head of marketing?   There are ideas in there that trickled up from our new Social Media Instigator....    which ones, I can't even remember...  but one of them may be the key to the product, and at the end of the day, ask seven different people who came up with an idea and you'll probably get seven different answers... because the truth is, we all did... and even if one person came up with it, feedback and inspiration from others goes a long way to hatching an idea.

Who's idea was it to do sponsored search terms at Google?  Who decided to allow pasting css and html in MySpace?   

After nextNY's Community Conversation on the NYC Startup Scene, I posted what I learned and promised to follow up in more detail.  I'm going to go out of order and slightly alter what I wrote:

"4. Our "heros" have their volume set too low.  We need to put a megaphone in front of the charismatic personalities of NYC and get them out in front of more people."

I think there's more to it than this.  There's a generation gap in the NYC tech community that seems to me a lot more pronounced than in the Valley.  Perhaps the big West Coast Venture funds propped up their failing bubble companies longer, carrying the community over the chasm created by the burst.  I was at the GM Pension Fund, an investor in many of these prominent funds, from '01-'05, and saw many funds throw lots of good money after bad in an attempt to return the capital invested from their Vintage '99 and '00 funds.  This allowed the Valley community a much softer landing than it seemed like the NYC companies had.

This really hit home for me because Jerry Colonna attended and really contributed a lot to the conference.  Jerry was a pillar of the tech community in NYC through the late 90's.  He had done a stint as the Editor of InformationWeek and helped co-found Flatiron Ventures with Fred Wilson.  He retired from full time venture investing a few years ago after Flatiron got rolled up into JP Morgan Partners and has spent more time on professional consulting and educational non-profit work.  I was lucky enough to get to know Jerry because he maintained an office at Union Square Ventures and shared our space... but most of the 20-somethings at the meeting had no idea who he was.  Same thing with a lot of the young entrepreneurs I've met through nextNY.  They don't necessarily know the Jason Devitt's, Fabrice Grinda's... people who built real stuff and exited in and around NYC.  I think the same thing when I talk to David Rose, who founded the New York Angels.  David's quite a character, and one of the most passionate people I know when it comes to getting excited about startups in NYC, but many of our members met him for the first time when we did Startup 101 last June. 

This isn't to knock these folks for not participating more in the community of future tech leaders...   Before recently, there hadn't been many opportunities to do so.  Now, we're seeing the growth of not only nextNY, but many tech focused Meetup groups as well.  The NY Tech Meetup has grown from 35 folks at Meetup's offices to 350 folks at the Great Hall at Cooper Union... and has spun off several niche groups as well. 

It is so important for future generations to learn from the experience of those who came before us.  Many young entreprenuers are asking... who are those people?  Are there more Kevin Ryan's out there and who are they?  How do we get them more involved in the community of young entrepreneurs?   

There's also something about NYC tech personalities...    they just don't act like big fish.  Maybe it's the size and scale of NYC that makes people feel like it's just not realistic to be a big fish... so they just go about their business, work hard, and don't worry if everyone knows them.  For example, I always think of the difference between Fred Wilson and Guy Kawasaki.  Fred's a great guy and I loved working for him, but he turns down more public speaking appearances than he accepts and I could never see him writing a book...   He's got all those blog readers in spite of himself and his modest personality.  He would certainly never call himself a guru of anything.   Guy's a very knowledgeable person, but he's a lot more skilled and interested in self promotion than Fred... and hey.. .that has led to success for him and certainly a big name, so more power to him.   It's just a difference of style.  I look at the USV portfolio companies as an example.  There are very few big and loud personalities among the group...  just a lot of smart, hardworking folks with great ideas.   That may be great for their businesses--less distraction--but sometimes, a little hype helps the community.  It gets the kids to stand up and notice that something is going on around them in the startup world and that maybe they don't all have to be Goldman Sachs investment bankers.   

I've met a lot of great NYC tech personalities in the last two years and I wish I could put a megaphone in front of all of them... one that can be heard in the financial strongholds of this city, the city government, the colleges, the high schools.... because right now, I feel like there isn't enough touting and not enough vocal leaders with experience to guide the ambitious young generation around me.

About two weeks ago, Technorati found the underlying domain that this Typepad blog sits on and decided that it was linking to this domain...  That's annoying.  So every post of mine has one Technorati link back to it... from my own blog mirrored at Typepad.  Ugh.

I'm not ready to shut down Twitter, but I'm close... and I heard a great quote about it tonight after the meetup... "I keep updating it hoping something will happen."  Totally agreed.   

There's now a list of the 50 Most Important People on the Web.

You want proof that the web is still a democratic place that is ruled by the little people?  Check out the dramatic dropoff after.... um.... about 15 or so.

Most of the people after 15 touch the lives of only a small handful of internet users and are pretty much unknown to most of the people not reading A-list tech blogs, with the exception of Tina Tequila of course.

Here are some comments on the list and notable exceptions:

• Phillip Rosedale coming in ahead of Meg Whitman and Jeff Bezos?  I'm sorry, but market cap and actual profits say otherwise.  You could say that eBay and Amazon are just a bunch of e-tailers, but consider Skype on the eBay side and all of Amazon's pay as you go backend web services as gamechangers.   I still haven't seen Second Life disrupt any markets yet or change any games.
• Drew Curtis of Fark came in ahead of the VP of Engineering of Mozilla...  I think even Drew would find that pretty laughable.
• Actually, Steve Jobs at #2...   This is the web, right?   As far as I knew, Steve Jobs is really effecting consumer electronics and digital distribution, but I don't really think Apple has much influence on the web.  Unless they've upgraded, isn't Apple a hardware manufacturer with a piece of proprietary desktop software? 
• Missing people?   How about anyone from AIM? 

I'm so glad I signed up for SXSW.   Not only does the content seem really  interesting, but there are going to be some great people there who I've never gotten to meet in person.  I'm really excited to hear danah speak and to finally meet up with Rob May from BusinessPundit.  I've been reading BP and chatting with Rob by e-mail for probably at least two years.   Matt Winn will be there, too, but unfortunately, no record of the event will get painted.  CultureJunkie Stephanie is also going to be in attendance. 

Also, a bunch of nextNYers including Noel, Andrew, and Michael.

Fred's also going to be there and so is Brian, which is good, b/c I owe him a meal.   

If anyone wants me to look them up or wants to join me (or others) at particular sessions, I've posted at least through Saturday of where I'm going to be on my PBWiki.

So Cisco thinks that by buying Tribe.net after buying Five Across that they're going to connect the world by way of all their big corporate clients.

Yeah, I'm pretty sure that's not going to happen.   Social networking is not about chips and routers or code or even design.  It's people.   

So what is the next wave of social networking?  What features would the ultimate social network have?   I think I can piece it together from what's already out there.  Here's what features I think the ultimate social space would have:

1. It should be a safe place to play, like Facebook.  No spam, no viruses.
2. It would allow people to attach themselves wherever they wanted to live, and dynamically by their natural actions, like MyBlogLog.  Being social shouldn't be an overt action...it should be the result of social behavior, like blog or photo content consumption.
3. It would have to be a platform like MySpace.  A place where other people could build on top of it and skin it, but freely, without fear of being shut off and clearly established business rules for participation and revenue sharing
4. It needs to work for me alone before it works for the group, like last.fm or Flickr or del.icio.us...all of which display my own content and behavior in an interesting and useful enough way to the individual user that they are worth using even before they get networked up.
5. It needs to be focus on communication, like AIM.  AIM represents the closest approximation of my real life network... the people I'm most interested in actually chatting with are the people I'm most likely wanting to be connected to.
6. It needs to cater to a wide variety of interests and be hyperlocal like Craigslist.
7. It should be dynamic and flowing in its display of activity, like Facebook, but in a way that is open to bringing in activity from other places, like SuprGlu.
8. It should be conversational, like Google or Yahoo! Groups, but with features that allow conversations to splinter into sidebars.
9. It should be mobile...  Facebook has a great mobile site... prob the most functional and easy mobile site I've ever been to...  Throw in a little Twitter, Dodgeball, GPS, etc...
10. It should make my life on the outside, in the meatspace, better, like Meetup... because, as much as I'm jacked in, I don't want to live my life virtually.

Please feel free to add to this in the comments, on your own blogs, etc.

Last night, nextNY had a great event at the midtown offices of CRESA Partners called NYCHub.  (We had originally called it Alley 2.0, but then we found out there was a breakfast earlier in the week with the same name, and so I just left it the name of the wiki page, to avoid confusion.  We had some great participates, including Jerry Colonna, Dennis Crowley, Alejandro Crawford, Saul Shapiro, and nextNY's own Darren Herman, and I'll write more about that later, but for now I just want to get my thoughts down and I'll blog more about it over the next few days.

1. The need for space in NYC isn't about needing a place to build your business, its about a place to aggregate community and meet other creative people.
2. Real estate is a red herring... no one seems to be having a real issue affording to live here.  (Bay Ridge as tech center?)
3. There is a serious lack of angel funding, and the expertise and guidance that comes with it, in NYC.
4. Our "heros" have their volume set too low.  We need to put a megaphone in front of the charismatic personalities of NYC and get them out in front of more people.
5. We need to refocus on our natural business advantages.  Instead of having the next nextNY open houses at AOL or IAC, the "tech" companies, we need to be having them at CBS Interactive, NYT Digital, Digitas, MLB Interactive and Goldman Sachs.
6. UPDATE:  After reading Darren's post, I realized I forgot the NYC education system as a point.   NYC students need to hear a lot earlier about entrepreneurship as an option.

More thoughts on this to come!

CNET Reporter and nextNY Caroline McCarthy is trailing in ValleyWag's VLog TechBabe Contest. 

Show some NYC pride and vote for the hometown girl!   She's only a hundred or so votes behind, so a big push from this blog should put her over the top. 

More LinkedIn fanboy action at TIGTTB...   Now I can just login with my Gmail account and easily connect with all my blog friends.   My comment notifications and nextNY listserv e-mails all get sent to Gmail so a lot of my contacts are sitting over there.  Every service should have this...  death to CSV files!