Paul Graham’s got a new essay, exploring why so much creativity emerges out of the margin. Worth a read.

Also, I recently finished Paul Graham’s book Hackers & Painters. It’s a brilliant collection of essays and I highly recommend it.

I commented last week on the reported transaction between IPG and Facebook.  Well, it turns out that my suspicions were valid, and that the deal was a misunderstanding.  There has been a clarification, reported by Rafat Ali, that the deal consisted of:

• an agreement that IPG would spend $10m in advertising on Facebook,
• an equity stake of 0.5% in Facebook going to IPG, at a valuation around $500m, and;
• the two agreements were separate.

This will let me take both IPG and Facebook a lot more seriously down the line.

Nivi pulls this gem out of The Innovator’s Solution:

“Because the process of securing funding forces many potentially
disruptive ideas to get shaped instead as sustaining innovations that
target large and obvious markets, the very process of getting the money
to start a venture actually sends many of them on a march toward
failure.”

Food for thought…

Marketing Vox reports an investment in Facebook By Interpublic (via Inside Facebook).

Interpublic Group
is in final negotiations with social networking site Facebook for a 0.5
percent stake in the site in return for spending up to $10 million for
the agency’s clients on Facebook, reports MediaWeek.

Obviously, the implication is a $2b valuation, validating the earlier rumors that Facebook had pushed for such a number when they turned down a $750m Viacom offer.

However, looking at the size of the deal, I think the equity part of the deal is a bit of a farce.  IPG is not a holding company of marketing services providers.  I don’t think they look at this as an equity investment, but rather an experimental media buy, or a biz dev deal.  However, by attaching an equity stake in the deal, at their own terms, Facebook puts itself in the books at a $2b valuation.

To me it looks like a prophecy they hope that will be self-fulfilling.

Don Dodge is relaying some wisdom from KP’s Ajit Nazare, based on a panel discussion. 

Kleiner Perkins‘s 7 rules for start-up are:

• Instant Value to customers – solve a problem or create value with the first use
• Viral adoption – Pull, not push. No direct sales force required
• Minimum IT footprint, preferably none. Hosted SaaS is best.
• Simple, intuitive user experience – no training required.
• Personalized user experience – customizable
• Easy configuration based on application or usage templates
• Context aware – adjust to location, groups, preferences, devices, etc.

Nothing revolutionary, but it’s a succinct list, and one to think about for a minute of two, if you have a software venture.

UPDATE: Paul Kedrosky has added his own 8th rule to this list.

Fred Wilson has a post about hiring the "best available athlete".  I’d like to offer a variation: hiring talented versatile generalists.

I had written about superstars a few weeks ago.  Superstars are wonderful, but there’s a scarcity problem there.  In the absence of superstars, I believe in talented generalists, who also tend to be "natural, all-around athletes", to continue Fred’s analogy.

In a start-up, the challenges vary with time.  In an organization with defined roles and resposnibilities, you can succeed with specialists, but when you’re lean, people will need to pull for each other and play various roles.  That’s why you need as many generalists as possible.

Umair has a thoughtful post on the clash of the collaboratve web with the editorialists. He summarizes:

There’s a new bourgeoisie in town, and they are just a wee bit elitist when it comes to connected consumption. You know the meme they’re pushing by now; but if you don’t, Jaron Lanier sums it up nicely for us:

“…But the hive mind is for the most part stupid and boring.”

Of course, Jaron here echoes folks like Nick Carr, Esther Dyson, etc.

I find this absolutely fascinating. Why? Because all of these folks are very intelligent, very sharp, very well-read, and very intellectual – but in this case, their arguments aren’t just elitist, lame, and reminiscent of corporatethink. Their arguments are deeply intellectually bankrupt: they’re not making real arguments at all.

You should read the entire post. I think he’s right. However, Umair does miss one point in his argument: How efficient are the collaborative “thought markets”?

What I mean by “collaborative thought markets” is the connected discussion taking place online. Examples are wikipedia, digg, ebay and amazon reviews. It’s hard to dispute the price of a transaction on eBay, especially if it’s a popular item. eBay is fairly liquid and efficient. The same may not be true for Amazon reveiws, or Digg…. yet! As collaborative markets get more liquid and efficient, and effective filtering tools get put into place, the argument Umair is fighting will disappear. You won’t be able to discern the difference between NYT and Digg. It only needs to get more liquid.

Fred Wilson has a post today on the rumored Web 2.0 portal initiative from Netscape, as well as his suggestion for Yahoo pulling together some of the services they have recently acquired:

I’ve suggested to a number of people at Yahoo! that they ought to create a web 2.0 portal with the excellent web services they’ve purchased in the past 18 months; Flickr, Delicious, Upcoming, and several that they haven’t but have been rumored to be interested in like Digg and Technorati. They could combine their excellent web search service, their social search product myweb, and even stuff like Yahoo! Answers and possibly 360.

His call is asking for a top-down move, which, I find, in itself, somewhat un-web 2.0. To satisfy similar needs, I find that there are independent tools that pull together, or mash-up these Web 2.0 services, such as GROU.PS, where you can effectively create a “group portal”.

Having said that, as a loyal MyYahoo user, I would still love to see Yahoo taking Fred’s advice.

Every time I log in, MySpace reminds me more and more of US broadcast TV.  It’s loud, lacks a consistent aesthetic, and as Nick Carr, inspired by Ivor Tossell, says, it’s mirroring the US society.

The need for self-expression is evident.  Just look at the number of ring-tone downloads, at $2+ (more expensive than full track songs) a pop.  What may help is a bit editorial help. Have we seen professional services for designing people’s MySpace pages?  We let designers into our living rooms, why not our online spaces?

If this is already happening, I bet it’s happening at CyWorld.