Saturday, December 16, 2006

Aspen Live!

I've been attending the 3 day music conference, Aspen Live. Yesterday, the featured speaker was Anthony Zuiker, the creator and producer of CSI: Crime Scene Investigation, one of the top rated television series for the past five years.

Just nine years ago, the aspiring writer worked as a tram driver at Las Vegas’ famed Mirage Hotel. Soon thereafter, he had a movie produced and is now famous for creating CSI. CBS has earned its spot as the number-one rated network due in large part to the series’ success.

Currently in its seventh season, CSI has received widespread critical acclaim and has earned distinction as the highest rated drama on television. The show earned its first Emmy nomination for Best Drama Series in 2002 and received subsequent nominations for Best Drama Series in 2003 and 2004, in addition to three Golden Globe nominations for Best Television Series (Drama). Produced by Jerry Bruckheimer Productions, Zuiker serves as Executive Producer of CSI and writes numerous episodes each season.

Anthony described his passion for music and outlined his commitment to use the series to "break" artists. Fascinating. This guy actually wants to give artists a forum, a platform that will help them reach the immense audience that television still provides better than just about any other medium. As he neared the end of his presentation, Anthony delivered an impassioned plea to those in the industry to focus on "the music."

He also described a new initiative he planned to pitch to CBS on Monday. I won't spill the beans here by laying out the details, but the audience seemed enthusiastic about the proposal. We'll have to see where this goes.

The second part of the evening featured a discussion led by Mike "The Goon" McGinley, Founder/CEO of SRO Consultants, and by Jeff Treuhaft of Verisign. This might have been a powerful forum: the topic was "Crossroads of Media and Technology," and the focus was on trying to come to terms with the gulf that separates the world of tech startups from the established, old school music industry - particularly the labels. Unfortunately, things didn't seem to get off on the right foot. Mike asked what might have been a rhetorical question: "what kind of success are you going to have with your business if zero dollars are allocated to marketing? He asked whether people in the room had read the book "Search" by John Battelle. Perhaps two or three of the group of 80 responded in the affirmative. He spoke about innovators, imitators and idiots - the path from value creation to value depletion in an industry and asked where the next Mo Ostin was going to come from. There didn't seem to be many answers.

The most interesting part of the discussion, for me, grew out of Mike's suggestion that the major labels ought to consider providing some portion of their content - perhaps 10-15% - to tech startups. He reasoned that this would be one way to improve the current situation - one in which tech/music entrepreneurs like Shawn Fanning (who developed Napster in 1998) feel compelled to "break the rules" to get content. He asked, somewhat rhetorically, what the audience believed young tech entrepreneurs would need to be able to coax a content deal from all four major labels. One of the participants - a marketing director associated with one of the major labels - asked why the majors should "give up" 10-15% of their deal. "What's in it for us?" On the other hand, the same person acknowledged that "the record business is dead; we're in the music business."

It sounds to me as though there's a desperate attempt by the industry to protect 70 cents of each dollar in a market environment where fewer and fewer dollars are being spent.

What was particularly disappoining about this discussion, for me, though, was the realization that very few of the people in the room are paying attention to the underlying business and market trends that are working together to provide alternatives - or certain death - the the industry as it has existed for decades. I asked whether anyone had read Chris Anderson's "Long Tail: Why the Future of Business is About Selling Less of More." Maybe someone else at the conference had read it. I don't think Mike had. The ideas in Chris's book are the things this industry needs to be talking about from morning till night. Right now, that's not what's happening at all. Which seems strange to me in what now appears to be the twilight of this once extraordinary industry.

Saturday, December 2, 2006

Barnes & Ignoble

Nanette and I went to see Bobby tonight. Great film. Marred only the slightest bit by an ending that expected the audience to process Bobby's stirring speech in parallel with the near-chaos of on-screen responses and reactions to his assasination. It was a little like having the dialogue in a film drowned out by the underscore. Nonetheless, a remarkable film. As the credits roll at the end, images of Bobby, his childhood, his and Ethel's kids, and his very warm and personal campaigning fill the screen. No one leaves the theater. No one. It's as though we're all transfixed, in part, because we're stunned by the contrast between Bobby Kennedy and the persons we experience today in politics. It was almost painful to watch.

After the film, we headed over to the bookstore to pick up a few things. I rarely come out of a bookstore with fewer than 5 items. This time, we must have purchased ten books between us, and as we arrived at the checkout, the experience was - sadly - something we've come to expect in customer service situations. I have the receipt. We spent just under $300 total. It would have been more, but I have a "preferred customer" card. That usually means that the person who has it is somewhat important to the business. As I fished in my pocket, I discovered another receipt from last month for something north of $500.

How were we treated by the person ringing up the sale? Like a leaking bag of dog excrement. Perhaps that's too strong. Or not. Really, this person cared not a bit about us or our purchases. She just wanted desperately to be doing something else with her time. Anything but wait on customers. Why do retail businesses in America so often present this face to their valuable customers? Why is good customer service an oxymoron, so ridiculously challenging to businesses that they seem to have given up on it altogether? And Barnes & Noble is not alone in this. Sadly, it's so pervasive that good service, when it happens, is an extraordinary experience. I suspect some of this is about training. Some of it is probably about a general decline in what was once a common sense of appropriate or polite behavior. And some of it is about a sense of entitlement - i.e., "I'm worth so much more than this menial clerking/service role I'm having to play right now; this is just SOOO wrong."

Whatever the justification, I'm not buying it. And I'd like to stop buying from companies that do so little to make the experience something pleasant - even for their very best customers. And that helps explain Amazon's appeal. Let's see, buy a book at the same price or less and get it delivered to my door with great reliability, or drive to a quasi suburban setting and be treated rudely by someone working the cash register. Hmmm. No wonder online sales are up 42%!

Wednesday, November 29, 2006

Product road map

It's a key time in the life of every startup. The team has diligently worked to pull together a fundamental understanding of the strategic plan for the company. Now it's time to operationalize the strategy by beginning to work through the basic elements of the product road map. What are the use cases and the key objectives? What needs to be accomplished and when? Where does each element lie along the critical path? What resources are available at each stage to realize the company's goals? What are the critical risk factors? What is the confidence level associated with completing each of the key components within the necessary time frame?

And all of this needs to be constantly considered with a view to the company's revenue model. My constant question: what's the shortest most efficient path to the company's long term revenue model?

That's a good part of what I did today with the executive team, and I have to say, I am very excited about what we're building here at Vault Alliance.

Tuesday, November 21, 2006

That Pocketfuzz is a Good Thing

Today, Dave Haynes, Niel Robertson and I met with Austin and Daniel from Pocketfuzz. Great guys. And Pocketfuzz is a very interesting company. They've managed to find a way to create a profitable business with just a few resources and do it in a very short space of time.

The Pocketfuzz model is simple, but powerful. They've created tools that allow artists - and their fans - to take any mp3 and turn a portion of it (any portion) into a ringtone. And they've navigated the morass of disparate carriers and mobile handsets from multiple manufacturers to provide the tools that are required to provide real value. And what's even better: they have a widget that makes this capability available to other companies. At a great price! (Free.)

Very interesting company. We'll see what happens.

Connecting the Dots

Today was an epiphany sort of day. Sometimes you can wrestle with a business model for days, weeks, even months and miss the one thing you need to see that would make the model work. That's what's happened for us. We've been thinking for a long time about a model that has a fixed set of inputs and a relatively unbounded set of outputs. It suddenly dawned on us today, thanks to Dave Haynes, that the model might really get legs if we took the handcuffs off the input side of the equation. (I'm being deliberately obtuse here; we're still very much in stealth mode.)

For many years, I've been an evangelist for the many-to-many revolution in the media/entertainment industry. As early as 1994 or 1995, I was convinced that at some point in the near future, much of the "programming" content that we all had come to depend on for our entertainment would be supplmented (and in many cases pushed aside) by content created by the audience/consumer. And that's what the epiphany today was all about. And it's interesting that even though I've long been a believer, I still didn't see this as the key to our model until Dave did a little sketching on the white board.

Thanks, Dave, for flicking the light switch!

Saturday, November 18, 2006

I Feel Shitty - Presentation Hell

The title to this blog is to be accompanied by a melody from the Leonard Bernstein/Stephen Sondheim's song, "I Feel Pretty." (West Side Story)

It started with that scratchy, dry feeling in the back of my mouth and grew into the sore throat that won't let you sleep through the night. By Thursday morning, I was rasping and gasping instead of speaking. On Monday, I'm supposed to pitch to a venture firm - one in which I happen to be a limited partner. If my speaking voice doesn't improve by then, it's going to be a very long and painful presentation.

It's interesting to think how completely subjective and inwardly focused most of us become when we're sick. It colors our experience of the world. But it doesn't just feel like "our experience" of the world is crummy. It feels like the world itself is crummy.

I spent a good portion of Friday afternoon going over the presentation with members of my senior management team. There are a couple of good reasons to do this. First, they each have a deeper connection than I do to certain specialized information that can be helpful to the pitch. Second, they pay more attention to the way that strategy and tactics are connected and the way the long term vision for the company is connected to specific milestones. But the real reason to do these presentations with the entire team - and I'm speaking here only about the early stages of a company - is to make certain everyone on the senior management team is playing the same game. And that each of us has his or her head in the game.

And now, it's time for a mini rant. I hate Powerpoint. I haven't been CEO of a tech company for more than five years now. And you know what: this frickin application hasn't improved in any material way in five years! This is how Microsoft is going to get it's head handed to it. Web-based apps - Ajax implementations and widgets of the sort that Google, Yahoo and others are deploying - are eventually going to displace the old MS Office suite. I spent an hour or so on Thursday editing the PPT pitch on my MacBook Pro. I sent it along to the team. On Friday, I opened the application, and all kinds of things in the application had changed. Things that had been transparent and without borders managed, somehow, to become opaque and grow lovely black lines around them. And this happened randomly throughout the presentation. I hate to spend even five minutes cleaning up garbage that

Friday, November 17, 2006

Pulling Things Together

A few weeks ago, I agreed to become the CEO of a startup. It wasn't a snap decision. I'd done this before - more than once - so I knew that if I stepped into the role, I was probably looking at committing at least 3-5 years of my life to this new company. For the past five years, I've been mostly retired, investing in a few companies here and there, managing a couple of artists (Kan'Nal, Otis Taylor and Clay Rose) and writing music as often as I could. But about a year ago, I helped fund a company with a few other friends of mine who do angel investing - including Howard Diamond, Brad Feld and Niel Robertson, and this time I became more than a little involved. I helped to chart the company's early course and took a seat on its Board of Directors.

Fast forward a year. I'm now back in the saddle, working with a management team to refine the company's value proposition and create a compelling offering - a business that will keep me sufficiently engaged that when 3 or 5 or 7 years have past, will have been a "game worth playing." I've always had a pretty simple definition of success for these things. Everyone - entrepreneur, management, employees, investors, partners and customers - can pretty much count a venture a success if they'd be willing to do it all over again. And that's my goal here. After the years have passed, I'd like most of the folks involved in this to be able to say that they were glad they gave whatever they had to give, and be able to say, in addition, that if they had it to do all over again, they'd do it again.

And that certainly has been true for me. Not all of the experience I've had in startups has been positive, but for the most part, my experience has been extraordinary. I love most of the people that have worked with me, and I'd work with them again in a flash. And I feel fortunate that many folks who worked with me before have the same perspective and have said they'd like to work with me again. My role in every one of the startups I've led (FortNET, NETdelivery, Service Metrics, and Latis Networks (StillSecure)) has been challenging and worthwhile. I've learned at least as much from my mistakes as from my successes. And I've been fortunate enough to make a good living. And then some.

But now that I'm at this again, I thought it might be worthwhile to do a "startup blog" to capture some of the ups and downs in real time. And if my previous experience is any indication there certainly will be ups and downs, highs and lows. At the moment, we're still pulling things together - the plan, the team, the financing, the partners - but it won't be long before things shift into higher gear. And I suspect there will be plenty of things to write about.