It's not everyday that John Battelle writes about a Turkish company, so this one's worthwhile. Apparently, a Turkish Flash game site called Oyuncambazi.com (no link!) has been comment-spamming John's blog. He finally blogged about it and given his high high authority on Google, this post is now the second organic return for a search on "oyuncambazi".
This is really amusing as I hate comment-spam, which costs me a couple of minutes a day, even with my low trafic blog!
Readers of this blog know that I am a big fan of Facebook. FB has truly changed the way a lot of people manage their relationships and share information.
What's been unique about FB is that they approached their business as a technology company, as opposed to a media company. They identified the potential problems and tackled them through technology solutions. They imagined the "newsfeed" and that has now been the default approach to online representation of people's lives.
Now there's news that Facebook is preparing to implement a Friend-feed like presence representation tool. What I don't like about this is the lack of innovation involved. So far, FB has broken new ground in every area they'd touched. I wonder if the company's size is beginning to effect their innovaton. Google had passed through these post start-up staged without comprimising its technology DNA. I hope FB is able to do the same.
Today I had a meeting with someone who works at a Corporate VC firm, which invests capital from the balance sheet of the corporation.
Historically, I had thought corporate VC's are a bit disadvantaged, since it's very difficult for the professionals to be compensated in the same way as VCs with a typical GP/LP structure. Their compensation resembles business developement teams more than investment managers. I am generalizing as I am sure there are exceptions.
However, this particular firm I met with just approved the same investment budget for 2009 that they invested in 2008. This is very interesting at a time when many VC funds are haggling with their LPs and facing uncertain prospects. I am sure that the 2009 budget for this firm will have significantly higher purchasing power than the same amount they invested in 2008. This could be a huge advantage.
It should be interesting to watch leading corporate VC firms like Steamboat Ventures and Intel Capital through this recession.
PS. There was also talk of Google formalizing its VC activity. I had not heard much about that lately…
I have been having a tough time blogging lately. A few weeks ago I
made a resolution to blog shorter and more frequently, and so far, I
have failed at this. Maybe it's because I have developed a certain style of writing and can not shift that easily.
It also definitely has to do with my work schedule. The downturn in the market has caused us at iLab Ventures to focus more intently on our portfolio and I am now involved at a higher level with the operations across the portfolio.
Nevertheless, blogging has been a critical tool for me in doing my job. It helps me track my thoughts across many facets and participate in the global conversation on venture investing. As my posts decline, I feel I am missing out on a part of that conversation.
So, once again, I resolve to blog more frequently. I am also considering blogging in Turkish from time to time. It makes a lot of sense to blog in the native language of my home and principal target market. I will have to see if it feels natural.
The SEC, in its quest to protect investors, has shut down Prosper, the peer-to-peer site that connected lenders and borrowers. It looks like Prosper claims it's a marketplace but the SEC asserts that it is enabling investments without proper licensing.
Details aside, I think this is a stupid move by the SEC, not to mention, ironic. While we're dealing with the mess created by the very industry the SEC is tasked to watch over, here they are shuttering a service that would probably provide some relief, albeit small, to the pains caused by the unprecedented tightening of credit caused by their failure.
I am a fan of P2P lending and think that the value it creates far overshadows the risks it introduces. I am rooting for Prosper in this battle.
GM is about to die. So, it's asking for a bailout. According to Baris, it even took out advertising to rally citizen support to its bailout demands. What's wrong with this picture?
First, look at the chart below. GM stock peaked in the late 90's? Why? Is that because GM made cars that people craved? Or is it because of its effective manufacturing innovation? It's neither. It peaked because it made gas guzzling bling cars. And they sold well in the booming 90's.
I move on. So now, they are bankrupt. With about $50b of debt and huge payables. And they are asking for a bailout. If they get one, it will be a populist political decision, for future votes in some key swing states.
And shamelessly, they are lobbying for support, spending money on advertising. I protest as a taxpayer.
Let GM fail.
A recent development is a further indication of how bad things have gotten in the capital markets. Large LPs are looking to offload parts of their private equity and venture capital assets, as reported by Henry Blodget.
One thing worries me here. These are sophisticated asset manager doing the selling, in a buyers' market. So who will be those buyers? They will likely be sovereign wealth funds, conservative large family offices, and maybe some lucky hedge-funds – the only players with the decision making power and liquidity that would be available to make purchases like this in today's risk-averse environment. Otherwise, no entity with a large shareholder base will have the guts to make this move. It's CYA time in those neighborhoods.
The fact that they sellers are smart guys means these were, at least at one time, well thought out investments. The reality of the buyers' market we're in means that these assets will likely change hands at some discount.
In other words, you have relatively high-quality assets, being sold relatively cheaply, by groups with a diverse shareholder bases (i.e. pension funds, etc.) to buyers who represent narrow shareholder bases (i.e. family offices, hedge funds).
Is this a case of the rich getting richer? I guess if sovereign wealth funds are buying, it helps diffuse the situation but I can't say I understand how those investment vehicles really work. It should mean that the fund represents the citizens of a country, which is a very diverse shareholder base, but my skepticism prevents me from buying that argument.
Sirius XM, the digital radio co, is trading at $0.20, off its 52 week high of $3.94. It's 95% down from that peak and about 99.7% down from its all-time high circa 2000. Still, it's a company with $1b+ revenues, so it's not insignificant. It's run by Mel Karmazin, who personifies old media to me.
I am not a bit surprised by the state of the company. I never got satellite radio. I presumed it's targeted at cars and delivered a constant, high quality signal so it was an improvement over traditional radio, but the high cost of equipment replacement and the high cost of subscription was always a barrier for me to ever become a customer.
Then I realized that the entire venture was dependent on biz dev relationships, which, for me, is the worst kind of competitive advantage for a business. And in this case, this dependency was with car manufactureres. The satellite radio companies were trying to get their equipment as standard accessories in cars, turning around and cutting expensive proprietary content deals, to turn and squeeze value out of customers.
This is so far from value at the edge. So much of old media still does not get what business they are in. I see this currently at play in Turkey, where the leading satellite TV provider, Digiturk, is trying to sell me Tivo capabilities for $500 for the box plus an increase in my $70/mo subscription. Are they nuts? I got my digital cable plus PVR plus unlimited local and national calls plus broadband in NYC (a very expensive city) in 2005 for less than $100/month.
Old media should look at their strategy, then at Sirius XM, and rethink. Fast.
I had not heard that the US Army had banned YouTube in May 2007. Its reasoning: "security and bandwidth issues".
Now the Army is announcing the launch of an alternative video sharing site, TroopTube. The move is being called "a "retention tool" aimed at a generation of soldiers who bring laptops to the front lines."
What they don't get is that YouTube is not a video sharing site, it is a part of people's lives. Their retention tool will not work. It will not replace YouTube. Just the way that USA Today they drop outside your door at hotels does not replace your NY Times, even though they both give you news.
What they also don't get, just like the Turkish courts don't, is that banning YouTube does not keep a population from accessing it. I am sure there will be leaks of sensitive information from military ranks through the multitude of channels available for sharing information.
YouTube, which has been banned in Turkey for months, is still the #11 most popular website in Turkey, accoding to Alexa. It woud have been Top 5 had it not been for the ban, but still, it's way ahead of all the alternative video sites.
What a waste of taxpayer's money, in both cases.
Seth Godin touches on an interesting issue today:
What can you assume about your audience?
If you’re running a commercial, sending out a sales letter, making a presentation–what have they seen? What do they know?
…
Your audience isn’t as homogeneous as it used to be. That means you have a few choices:
1. Inquire. For a small group, or for important interactions, ask.
Ask if they’ve been to your site or read your recent blog posts. Ask if
they use this software or that software. Ask if they’ve seen Buckaroo
Bonzai or not. Ask if this is the first time in your restaurant (or
better yet, let your database tell you).
2. Assume. If you don’t ask, you’re going to have to guess. You can
make it clear you’re assuming, which puts the burden on the unclued to
keep up, or you can take a huge risk and just assume. This strategy
works best for large groups, where hitting a home run with half the
audience is probably worth the journey.
3. Punt. Don’t ask, don’t make thoughtful assumptions, just pretend
we’re living in a three-channel, all-on-the-same-page universe. I think
this is the default setting for most marketers, and quite a mistake.
It's a point I dwell on for a bit every time I blog. If I am making a reference, how much background context should I provide. If I mention Facebook or Yahoo, do I link to it? I try to go the second round and assume. But usually, I probably end up punting, since the assumptions are usually not that straightforward. Asking is very difficult in the blogging environment.
Wow, heavy Seth influence on SortiPreneur today. :)
Cem Sertoglu 