The most recent tracks I've been listening to on last.fm:

A short time ago, I got invited to testify in front of the NYC Council. The hearing is supposed to:

"...focus on improving the city’s technology small business sector. The hearing will examine the state of a business sector that NY has traditionally lagged behind in, specifically the recently created NYC Seed program, which will provide up to $200,000 (per company) of investment into New York-based technology start-ups. The hearing will also examine what steps can be taken to better fund (i.e. venture capitalism) the growth of startup technological companies in order to make NYC more competitive with other cities when it comes to the technology sector."

Here's the testimony that I'll give today:

Charlie O'Donnell (charlie@path101.com)

Co-founder & CEO of Path 101 (www.path101.com), Founder, nextNY (www.nextNY.org),  Blogger (www.thisisgoingtobebig.com), #71 on 2007 Silicon Alley Insider Influentials list, Adjunct Professor of Entrepreneurship - Fordham University, Instructor - ITAC FastTrac

First, I'd like to say thank you to the Council members who continue to have a strong interest in the NYC technology community.   Having a critical mass of influential people committed to maintaining and improving New York City as a place for innovation is half the battle.

Unfortunately for an organization as large as the New York City government, the other half of this battle is a ground war.  The ideas that will have the most impact on the local technology community are those that go house to house, school to school, wifi node to wifi node.  The stumbling blocks to improving our area's ability to promote innovation aren't simple--they're nounced. 

Take, for example, the NYC Seed program.  There has never ever been a lack of capital in New York City--for any kind of investment.  Many startups have been funded by people in the financial or real estate industries, when they're not funded by traditional venture capital firms.   No, money is not the issue, as I have written about before.  The issue is that there are not enough dedicated institutions who are economically incentivized to build community and business infrastructure here.  Owen Davis, at the end of the day, is one guy with $2 million who will get the chance to help 10 companies over the next year.  That's fantastic, but what if policy changes lead to the abandoning of this program.  Other than those 10 companies, which early stage statistics assume that at least half probably won't make it anyway, what will be the permanent impact of his work? 

If he had, let's say, a four year window, as most venture capital firms do, he'd have the time to build the necessarily relationships with all of the places where innovation comes from here in the city.  If he had a staff member or two, he'd be able to spend time not just investing, but working to create permanent channels to schools, businesses, professional groups, and technology centers--and he'd have the time horizon to accept longer term return on investment from building these relationships.  Institutional investors give their VCs a four year mandate to make investments across economic cycles--there's no reason why NYC Seed shouldn't have the same runway.  

At the end of the day, longer committments and more people on the ground are needed because innovation comes not from technology, but from people--and New York City technology has a people problem.  Local schools, with few exceptions, are not consistantly developing students focused on creating value through entrepreneurship and technological innovation.  You can build all the incubators you want--unless you're seeding students as early as high school or junior high with the idea that they could build the next Google here in New York, and giving them the learning tools to accomplish that, it's never going to happen.  

Here are two suggestions I'd make for New York City to make a bigger people impact:

First, I'd create the position of a technology community manager.  Large websites have community managers to make sure that they're aware what's going on in their communities, and that their communities are aware of all of the site's resources.  I'm as involved in the local community as any entrepreneur, and I still can't tell you the difference between what the NYC Council's mandate is related to technology and how that differs from the EDC, the Department of Small Business Services, how they relate to NYSTAR, etc.   A community manager would be a single point of contact whose mandate would be to familiarize themselves with all city services, local university programs, community groups, large businesses interested in working with the local tech community and other initiatives.  For example, nextNY is looking to run an event on business development best practices for startup companies.  We're looking for some space to run the event for between 50-100 people.  We have no budget.  I know there's probably some big company with a sizable conference room who'd love to have a bunch of startups come in and talk about business development one night.   I just don't know who that is and how to contact them.   A tech community manager could do that--and significantly help with these types of issues that involved local entrepreneurs try to solve on their own all the time in addition to their dayjobs.  

The second thing I would do would be to refocus on technology education in not only the public school system but also work with private schools and universities as well.  It needs to start early, too.  We can't have all our creative and talented youth thinking that their only opportunity for success in NYC is to work for a Fortune 500 company, because small business and entrepreneurship is what drives the growth in our economy.  How about a charter school built around information technology entrepreneurship--one that works with the best local computer science programs to provide scholarships to students trying to create their own businesses?   We need better answers to the question, "Where do world class developers come from in NYC?"   Right now, the school system isn't the answer to that question.

More than anything else, though, I think it's important that our local government--the individuals--lead by example and participate in the local technology community.  The local community is hyper connected through blogging, social networking sites, and a quirky but rapidly growing service called Twitter that ties people together one 160 character short form message at a time.  There are currently almost 2000 up and coming technology and digital media professionals on the nextNY listserv--are any of you on it?   Sure, it's kind of geeky in it's content, but you can set it to provide a daily digest.   If you're not on it, and can't spare the time to read the one daily digest e-mail of the group's activities, I'm not exactly sure how you're really going to be able to be supportive of the local tech community.  Communities are growing organically on these sites--like the 500+ people who have attached themselves to the Shake Shack Twitter account, mostly local tech folks, in order to navigate the long lines at our favorite local food establishment.   These communities are growing largely without the participation of local government leaders.  How many of you have a blog on your own websites that gets at least one posting a week, or a social networking profile that you yourself actually login to with similar frequency?   If you're not doing this, you're really not going to be in the flow of the needs of the local community.

Last week, Sam Lessin of Drop.io hosted a talk on the future of venture capital.  A question was asked as to weather or not there will be a need for venture capital as it becomes cheaper and cheaper to build a company.

I have to be honest...This cheap to build a company thing is one of the biggest steaming heaps of sheep poo I've ever heard.  I keep waiting for some TV voice to say, "You, too, can have a Web 2.0 company of your very own for 3 easy payments of $19.95!"

Yes, it is orders of magnitude cheaper to build an internet web service that hundreds of thousands of people use, but that doesn't make it a company.  Without a business model or significant revenues, you do not have a company.  In fact, you do not even have a product, because, last time I checked, products have the potential to generate revenue. 

Web services with hundreds of thousands, if not millions of users--those are products.  They can start generating revenues because their "product" is access to a community and they sell that to advertisers.  Without a large community, what you have is a prototype--an experience even.  I don't care how many people were in the beta.  I smile when VCs look for "early traction", since I'm not even sure that 100k users is proof of much of anything that seriously de-risks the business.  Yes, you built something, but that doesn't mean it scales, crosses the mainstream chasm, or that it can be a business.  Of course, you'd rather have those people than not, but success is still very much an uphill climb from there. 

To generate significant, sustainable revenues, you have to have sales people, support people, management, marketing people--and last I checked, salaries have gone up in the last x years.  All they do is go up.  So, while you're not paying Microsoft for server software, you're still paying for great marketing people and probably more than you used to.  Real companies have real expenses, like people, rent.  Technology overhead, while dramatically lower, shouldn't be your number one cost once you reach a certain scale--unless you're crawling the web or streaming video, and funny enough, those costs can still pile up.   I don't see YouTube paying their bandwidth bill on spare change yet.

Even if you're PlentyofFish, overhead makes a company.  Despite the revenues, I'm not sure that a company has been built there.  It's certainly not one I'd want to buy, because there's no institutional knowledge, no brand work, etc.  What do you have if you buy it and Markus gets hit buy a bus?  You have someone else's keyword click generator without the instruction manual.  It's certainly not the kind of thing that lasts past the founder, which makes it a really awesome lifestyle business, but not really a company.  In that case, cheap to build has been swaped out for sustainability.

Its not even true that you're getting to market that much faster either.  If you were building a semiconductor company ten years ago, sure it took you two years to complete a chip, but the day it was done, you signed your first million dollar order or someone bought you.  How long is it taking Web 2.0 companies to generate that much in revs?  On average, just as long if not longer.  If your goal is 25 mil in revs and 50-100 people to support that effort, then its really not so cheap to build a company.  Cheaper than it was perhaps, but not discovery of electricity cheaper.  Oh, and whatever magnitude cheaper you're building companies at now is also the magnitude of price degradation in the market.  There's more competition for that discretionary dollar and higher expectation on behalf of the consumer.  If you can build cheap, than someone else can, and then prices go down... so cheap to build doesn't mean sustainable margin expansion.

What about Craigslist?  Twenty something employees driving teens to twenty in revs in 300 cities. 

What about it? 

JK Rowling prints that in a week and she probably has a support team of about that size, too.  She's basically a company. Her licensing deals are just printing money for her at ridiculous margins.  It's a media model, and Craigslist is basically a media company.  

Also keep in mind that, by dollar, web services only represent a tiny percentage of what VCs invest in.  Many VCs are investing in chips, routers, devices, pharma, materials...even retail... Still putting 10-20 million dollars to work in a deal.  None of these companies have been built on Web 2.0 capex models.  They require people, hardware, buildings, tangible products.

So, to think that there's no need for VC anymore because a small percentage of the market needs less money seems a bit silly.

I'm really surprised at Dave Winer. 

He just compared Twitter to Netscape and proposed that the microblogging company may get left in the dust if it doesn't work to "open up".  He then outlined all the mistakes that Netscape made when it lost the "browser war" to Microsoft.

Only...  he didn't even get close to half right in his assessment of why Netscape failed and the lesson that Twitter should learn from it.  I would think with his experience, he'd know better.

His first point:

"Netscape had left their Mac browser to languish while they focused on Windows. Microsoft, realizing that most web developers used Macs, produced an excellent Mac browser first, and worked closely with Mac developers to make sure their browser worked with the Mac software web developers used."

Actually, Microsoft signed an agreement with Apple to be their default browser for 5 years starting in 1997.   When you're the default browser on operating systems that operate 90%+ of all computers, then of course you're going to have dominant market share.  When you're talking mainstream usage, people will click on whatever browser brings them to the internet for the most part, not whatever the web developer using a Mac told them to use.

Did Dave forget that Microsoft's anti-competitive behavior around the browser cost it nearly a billion dollars in fines?  Seriously, when's the last time someone ever accused Microsoft of winning market share by building a superior product?   It was Microsoft's ruthless business practices that won them share, not quality of product or developer outreach. 

When the agreement expired, and Apple switched to Safari as their default, IE for Mac share went down the tubes.  So much for the superior product and developer relationships. 

Lesson for Twitter here?  None.

Second point:

"Netscape let anyone download their browser for free, but charged corporate users for the software. Microsoft's browser was totally free for everyone."

True, but again... what's the Twitter lesson here?  Twitter is free and they're not even charging for use of their API, no matter how much people pound it.  If anything, there have been developers who have called for Twitter to start charging for a better level of API service.

Third point:

"Microsoft fixed bugs, enhanced performance, listened to market and responded, did all the things a mature company that remembered its entrepreneurial roots could do. Netscape, being a disorganized, chaotic Valley wunderkind, did none of this."

Obviously, Dave hasn't used Twitter in the last six months, because Twitter, if anything, has done a seriously commendable job hearing the performance issues and systematically solving them.  The Fail Whale is nearly extinct and anyone who uses Twitter really can't argue with the amazing turnaround in the performance of the service. 

Microsoft fixing bugs?  Really...    Again, here's Dave accusing MSFT of winning through product quality.  Bizarre.

Dave goes on to put Twitter in the same boat as IBM, who tried to shut down the clonemakers and lost the PC Software market.   Twitter isn't trying to do that.  Frankly, they're not paying much attention to the clones mostly because their users aren't.  People like Twitter.  Users have an emotional attachment to the service that is actually very reminiscent of how people feel about Apple.  The mass migrations to Pownce, Jaiku, Indenti.ca, and Friendfeed never happened.  

I forget who said it, but Dave's post reminds me of when someone in the tech blogs said that "Open means 'gimme' ".   People who want "open" are the have nots, and for the most part, most users are pretty satisfied with closed when there's a good quality product.  Apple is a shining example of that.  People want good and simple more than they want open. 

That's not to say that Twitter doesn't have a monetization challenge ahead of it.  It also needs to do a better job of explaining it's value proposition to mainstream users and signing up group of people at a time.  If anything kills it, it's not going to be the fact that the service isn't open enough. 

Links I've recently tagged on del.icio.us:

2008-10-23_1751, originally uploaded by ceonyc.

McCain asked me whether I wanted to make my own "Joe the Plumber-esque " sign. I adjusted it for my own purposes. :) It looks much better now.

Path 101 conversation on Chatterous this morning...  Jen, Alex and I were all in the office, and Hilary was working remotely today.  Tell me we're not a fun bunch to work with...

[ 10/23/08 11:09 ] alex lines says:

whoah, business mullett

[ 10/23/08 11:09 ] alex lines says:

in the wild!

[ 10/23/08 11:10 ] Hilary says:

photo?

[ 10/23/08 11:10 ] alex lines says:

hmm, if he comes back by I'll try to snap one but it could be dangerous

[ 10/23/08 11:11 ] Hilary says:

heh

[ 10/23/08 11:12 ] Jen Oslislo says:

what does one do if a mullet is provoked into attack?

[ 10/23/08 11:12 ] alex lines says:

judicious use of scissors can sometimes work

[ 10/23/08 11:12 ] ceonyc says:

Don't run

[ 10/23/08 11:12 ] ceonyc says:

they can smell fear

[ 10/23/08 11:12 ] ceonyc says:

lie still

[ 10/23/08 11:13 ] Jen Oslislo says:

climb a tree?

[ 10/23/08 11:13 ] Jen Oslislo says:

ah

[ 10/23/08 11:13 ] ceonyc says:

Are you kidding?

[ 10/23/08 11:13 ] alex lines says:

or start playing "I'm proud to be an american" and they'll be forced to stand still and salute as you make your getaway

[ 10/23/08 11:13 ] ceonyc says:

Mullets can climb trees!

[ 10/23/08 11:13 ] ceonyc says:

They're expert climbers.

[ 10/23/08 11:13 ] Jen Oslislo says:

haha

[ 10/23/08 11:13 ] Jen Oslislo says:

can they swim?

[ 10/23/08 11:13 ] Hilary says:

hehe

[ 10/23/08 11:13 ] alex lines says:

definitely not

[ 10/23/08 11:13 ] ceonyc says:

And they "fly", too... like squirrels

[ 10/23/08 11:13 ] ceonyc says:

that's what that tail is for

[ 10/23/08 11:14 ] ceonyc says:

used as a glider

[ 10/23/08 11:14 ] alex lines says:

though they are borne along the top of the water on an oily slick

[ 10/23/08 11:14 ] Jen Oslislo says:

you'd think it would act as a rudder in water

[ 10/23/08 11:14 ] ceonyc says:

Yes, but they're not bouyant.

[ 10/23/08 11:14 ] ceonyc says:

Sink straight to the bottom

[ 10/23/08 11:14 ] ceonyc says:

like your ID card in the toilet.

[ 10/23/08 11:15 ] Jen Oslislo says:

do they also have an innate fear of urine?

[ 10/23/08 11:15 ] alex lines says:

it's territorial

[ 10/23/08 11:16 ] Jen Oslislo says:

interesting

[ 10/23/08 11:16 ] Jen Oslislo says:

so charlie... do you shave your head to hide your true mullet nature?

[ 10/23/08 11:16 ] ceonyc says:

No, my mullet ran off with another woman.

[ 10/23/08 11:16 ] alex lines says:

that's what I was wondering. maybe charlie's hair only grows in one shape

[ 10/23/08 11:16 ] Hilary says:

I think we've all been wanting to ask that question.

[ 10/23/08 11:16 ] Jen Oslislo says:

hahaha

[ 10/23/08 11:17 ] alex lines says:

did it run off on her head?

[ 10/23/08 11:17 ] Jen Oslislo says:

if a mullet bites you, do you grow one yourself?

[ 10/23/08 11:17 ] ceonyc says:

Yes

[ 10/23/08 11:17 ] ceonyc says:

You can only kill it with Holy Water

[ 10/23/08 11:18 ] alex lines says:

from a hairdresser's spray bottle

[ 10/23/08 11:18 ] ceonyc says:

The power of Christ compels you! The power of Christ compels you!

[ 10/23/08 11:19 ] Hilary says:

This whole conversation just gave me a vivid flashback to this show I saw once as a kid - Hell Toupee: http://www.imdb.com/title/tt0511100/

[ 10/23/08 11:19 ] alex lines says:

oh it was an amazing story

[ 10/23/08 11:19 ] alex lines says:

i remember those

[ 10/23/08 11:19 ] ceonyc says:

"That story is amazing!"

[ 10/23/08 11:19 ] alex lines says:

very touching

[ 10/23/08 11:20 ] ceonyc says:

IMDB User Comments: Guilty Pleasure

[ 10/23/08 11:21 ] Hilary says:

There must be a killer mullet movie somewhere.

[ 10/23/08 11:21 ] Jen Oslislo says:

if not, yet another potential revenue stream for path101

[ 10/23/08 11:22 ] Jen Oslislo says:

we could just film alex trying to photograph the mullet

[ 10/23/08 11:22 ] ceonyc says:

http://i212.photobucket.com/albums/cc157/whitey_cid/mullet.jpg

[ 10/23/08 11:22 ] ceonyc says:

Best. Mullet. Ever.

[ 10/23/08 11:22 ] alex lines says:

one of my favorites

[ 10/23/08 11:22 ] Jen Oslislo says:

that is a beaut

[ 10/23/08 11:22 ] alex lines says:

mccain supporter

[ 10/23/08 11:22 ] Hilary says:

And the shorts... wow.

[ 10/23/08 11:23 ] ceonyc says:

Actually, it's one of Sarah Palin's kids.

[ 10/23/08 11:23 ] ceonyc says:

Mullet Palin

[ 10/23/08 11:23 ] alex lines says:

don't you mean jorts

[ 10/23/08 11:23 ] Hilary says:

haha

[ 10/23/08 11:23 ] ceonyc says:

Great accidental product placement for safecraft.com

[ 10/23/08 11:24 ] ceonyc says:

Safecraft Safety Equipment is used by most of the top professionals in Motorsports, Automotive, Aviation, Marine and other demanding industries.

[ 10/23/08 11:24 ] Jen Oslislo says:

i can't stop looking at it

[ 10/23/08 11:24 ] ceonyc says:

Saw that one coming.

[ 10/23/08 11:28 ] alex lines says:

yep, that's him, businessmullet. http://www.mulletsgalore.com/classifications/01/

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The Rays have home-field advantage because the AL won the All-Star Game this season. That game was won by Rays pitcher Scott Kazmir and lost by Phillies pitcher Brad Lidge. Evan Longoria drove in the tying run with an eighth-inning hit off former Phillies closer Billy Wagner.

The Baseball Analysts: World Serious Predictions

The most recent tracks I've been listening to on last.fm:

Last Monday night, we had a board call and Hunter (Walk....Our 3rd board member) said to us, "If you need me to be the asshole, I will. Here's the plan I want to see and the questions I want to see answered by the next time we talk."

The next day, Alex and I had one of the best product discussions we've had since we first started building. We agreed upon a clear set of priorities and next steps. It touched off a week of great product planning and iteration. Having a bit of pressure from a demanding outsider asking tough questions--the right questions--really kicked us into gear. With the distraction of fundraising, we hadn't reengaged on our product thinking and the roadmap clearly needed a bit of repaving.

It's not surprising, either--because it's often the role I play when startups come to me seeking product feedback. With a singular focus on user value and a disregard for maintaining the pleasentries of day to day coworker repore, I can play the asshole role for a company clearly needing focus and product direction. It's just a matter of being direct, being constructively critical, and leaving nothing as too sacred to question.

It's difficult for the person driving the product vision to be its most demanding critic, so having a dedicated outsider can be more than good housekeeping. It can be a mission critical discipline.

more music charts

I can't wait for election, because, no matter who wins, that will be one less thing for us to be uncertain about. When you see the markets bounce around a few hundred points everyday, you know it's because they're in the dark--just not enough real information about the future so they're going on gut and emotion.

I think you'll see a runup right after the election, especially if there's a clear and decisive victory that gets called before we all head to bed. Then, it will be up to whoever wins to follow through in the next year+ on the hope for a better tomorrow that has been entrusted to them.

Powell cites McCain's inability to provide clear answers on the economy, his campaign campaign tactics, and the Palin nomination.   He said that Obama displays an intellectual curiousity and vigor, and brings the kind of approach we need.

"Because of his ability to inspire, because of the inclusive nature of his campaign, because he is reaching out all across America, because of who he is and his rhetorical abilties... as well as his substance...he has met the standard... he is a transformational figure... and for that reason I'll be voting for Senator Barack Obama."

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You just need to do some keyword research, and then make a blog post that is optimized for the keywords that your ideal women are looking for.

Homethinking is a NYC based startup in the real estate sector whose DNA lies in data--turning vast amounts of public data on housing sales, real estate agents and demographics on its head to empower buyers and sellers.  For example, you can lookup the sales record of that agent who keeps pestering you to keep them in mind when you're ready to sell.

Recently, they released their Compare Neighborhoods feature--actually, I think of it like a translator.  Moving from San Fran to New York?  Check out what Big Apple neighborhoods are demographically and socioeconomically similar to the Misson or Noe Valley.

Here's a comparison for someone moving from Russian Hill into Brooklyn.  Apparently, they should move to Carroll Gardens.

Here's what I like about it:

They took their existing dataset and thought about the real life problems that people need to solve.  Interestingly enough, we're working on the same thing now at Path 101--trying to figure out how you could get into a particular job, industry, or company, given your current resume.  Just getting a user from Point A to Point B is fantastic feature that more people need to think about because:

1) It simplifies the value proposition by making it goal oriented.

2) It informs you about the user--where are they now and where do they want to go is a lot more information than most people get out of a registration process.

3) It's functionality that could live outside of the registration-only part of the site, so you're proving your value before you ask for anything.

Here's what I think could be better... or at least improve the effectiveness.

Building something like this as a black box is really hard--and if you don't get it 100% right, you really don't give someone a lot of degrees of freedom or ways to improve it themselves.  Maybe they want to emphasize a certain criteria more than others.  Not only is that interesting data for you to record, but it keeps the user engaged and puts the ability to get their questions answered at the tips of their fingers.

So, I'd want to see this in a much more open format--where I could actually see the stats that are being compared.

The other thing I might do, and this could really get into some heavy, ugly, natural language/semantic analysis, is to pair up with Outside.in to parse out what people are talking about in each neighborhood.  I have a feeling you'd come up with a lot of interesting keywords around restaurant types, ethnicities, and all sorts of interesting descriptions like "quaint", "hipster", "young", "families", etc...   Either way, pulling Outside.in newsfeeds should be a must for any site that has anything to do with Neighborhoods.

A survey might also be interesting...   like, "Do you have a family?" "Are there a lot of places to take your kids?"   I'll bet you that you could do 20 questions that could tell a lot about a neighborhood that would improve the quality of these matches or give users more detail.

So check this out...  what did you think?  Does it make anyone want to move to Bay Ridge in Brooklyn?

Note: While I had totally meant to get around to writing about this feature release, I didn't really focus on it until Niki answered the call to participate in my Donor's Challenge.  For a $200 donation, I agreed to review the Neighborhoods feature.  Want in?  E-mail me!  charlie at path101 dot com