The Latest from TechCrunch |  |
- eBay Launches One Stop Shop For All Things Fashion
- JanRain Brings OpenID And Other Single Sign-On Options To iPhone Apps
- Will The iPad Blend? Well, Yes.
- Truphone for iPad Turns Your Tablet Into a TabletPhone
- EMG Includes iPad In Patent Infringement Lawsuit Against Apple
- Reliance Buys 50 Percent Stake In British Game Developer Codemasters
- iPad Day In Numbers: 300k Devices Sold, 1 Million Apps And 250k iBooks Downloaded
- Swedish Company, People Of Lava, Creates An Android-Based TV
- Former AOL, Experian Executives Join Rubicon Project
- Concerned About Its New Privacy Policy, German Minister Threatens To Quit Facebook
- Google To Buzz Users: Are You Sure You’re Not Oversharing?
- Source: Elevation Partners Got About 1% Of Facebook For $90 Million
- Trouble In Paradise: iPad Users Complain Of Wifi Issues
- NSFW: It’s Easier To Run, And Other Lessons That Entrepreneurs Can Learn From ELEW
- Top VCs Debate Rising Startup Valuations [Video]
- Copy/Paste Innovation: Groupon Gets Cloned In Russia And China
- Fake Steve Jobs On The iPad, Conflicts Of Interest, And Apple’s Draconian PR Tactics
- The Art of the Introduction: Top Ten Tips
- Help Key: Syncing and Sharing On the iPad
- The App Store Now Has Over 3,000 iPad Apps, Only 20 Percent Are Free
| eBay Launches One Stop Shop For All Things Fashion Posted: 05 Apr 2010 08:20 AM PDT
EBay has never been known as the premier fashion mecca in the online retail world. Yes, you can find designer goods on the auction site, but the validity of these goods has been tarnished slightly by reports and subsequent lawsuits of fake designer items being sold on the site. But the e-commerce giant is hoping to change this. eBay recently launched FashionVault, a site that sells designer clothes and includes Gilt Groupe-like flash sales on designer items. And today, the company is launching eBay Fashion , a “new enhanced shopping destination for clothing, shoes and accessories on the world's largest online marketplace.” It’s sort of like a one-stop-shop for all things fashion on eBay. The site promises more advanced and customized features to surface and showcases the new, vintage, branded and designer merchandise included on the 19 million average daily listings on eBay. New features include enhanced browsing capabilities, with a dedicated "Fashion Tab" in the top navigation on the eBay homepage. Users are given the choice to shop by boutique, brand, category, similar items and trends. Other new functionality includes a "More Like This" feature that will surface other apparel and accessories items that are similar in color, shape, pattern and more; and tailored boutiques for categories like Women's Clothing, Men's Clothing, Women's Shoes, Men's Shoes and Handbags. eBay is also soliciting tips and advice from fashion insiders and stylists that will curate shopping lists and looks from the Marketplace. It seems that this new fashion-focused site is more than just a push towards getting fashionistas to visit eBay. eBay recently sectioned off its classified site to this could be representative of a strategy towards fencing off their marketplace sections to create niche retail and content portals.      
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| JanRain Brings OpenID And Other Single Sign-On Options To iPhone Apps Posted: 05 Apr 2010 08:19 AM PDT
The only thing more cumbersome than creating a new account at every Website you want to sign into is having to create a new account before you can enjoy an iPhone app. The Web is well on its way to solving this problem with OpenID, Facebook Connect, and other universal identity systems. And, of course, plenty of iPhone apps use Facebook Connect or Twitter OAuth already. But today iPhone developers are getting a new option from JanRain: a menu of sign-in options from OpenID providers (Google, Yahoo, AOL) to Facebook Connect to Twitter. Janrain is taking its RPX product, which is used by about 200,000 Websites and launching a developer toolkit in beta. iPhone developers will be able to use it to create a scrolling menu of sign-in options (RPX supports 16 identity platforms). Developers can pick and choose which sign-in options they want to present. Once a user picks an options, such as Google or Facebook, then the app will remember that preference the next time it is launched. JanRain charges for its service (a few pennies/user/year at high volumes). The company raised a $3.25 million Series A last December. It started out supporting OpenID providers, but now includes other identity platforms as well.      
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| Will The iPad Blend? Well, Yes. Posted: 05 Apr 2010 08:18 AM PDT
Tom Dickson, founder of Blendtec, did it again. As part of the ‘Will It Blend?’ series of infomercials for the brand of blenders, Dickson massacred an iPad and put it into one of his Total Blender machines. Then he pressed the ‘on’ button. You can probably guess what happens next, but here’s the video, released just minutes ago (via @SteveRubel):
If you enjoyed this, go here for more iPad torturing. And here’s the one where Dickson blends an iPhone 3G:
     
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| Truphone for iPad Turns Your Tablet Into a TabletPhone Posted: 05 Apr 2010 08:10 AM PDT  Just when you thought side-talking was dead, Truphone has release Truphone for iPad, an iPad-ready of their popular VoIP service. The system uses the iPad's built-in speaker and mic to create what could be the most ridiculous talking experience you've ever seen. The app worked quite well and if you've used it on the iPod Touch you're familiar with the call quality - standard - and ease of use - standard. It's great for making quick calls from abroad, however, and until Skype goes iPad we're kind of stuck with it. 
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| EMG Includes iPad In Patent Infringement Lawsuit Against Apple Posted: 05 Apr 2010 07:17 AM PDT
From the initial lawsuit, the patent filed by EMG in 1999 covers methods for reformatting Web pages onto TVs and mobile devices, as well as for manipulating those Web pages using zooming and scrolling techniques. The suit is specifically targeting the touch-screen browser on the iPhone, but it could just as easily apply to any mobile browser, including the one on the iPad. The name of the patent is "Apparatus and method of manipulating a region on a wireless device screen for viewing, zooming and scrolling internet content." As we wrote in out initial assessment of the lawsuit, the patents seem quite broad and obvious, making for a weak complaint. Much of the basic technology that EMG alleges Apple stole has been used for decades. But the complaint addresses interactive TV technology, which may have more standing on the iPad. Last week, Apple was served with a patent infringement lawsuit filed by Taiwanese chip maker Elan Technologies, over the use of multitouch technology in the iPhone, iPod Touch, and iPad. And a few weeks ago, Apple filed a similar patent infringement lawsuit against cell phone manufacturer HTC, involving 20 Apple patents related to the iPhone's user interface, touch technologies, underlying architecture and hardware. Apple was also involved in similar patent litigation with Nokia. However, that lawsuit is more about Apple trying to get Nokia to license its patents. It’s still unclear how strong EMG’s lawsuit is against Apple, but legal issues involving patent infringement are messy and complicated for both parties involved, and Apple now has to content with at least two of these nasty complaints.      
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| Reliance Buys 50 Percent Stake In British Game Developer Codemasters Posted: 05 Apr 2010 06:54 AM PDT
Founded in 1986, Codemasters is one of the oldest British game developers, and is currently seeing yearly revenues of $150 million. Codemasters also has a partnership with Warner Brothers Home Entertainment, which distributes Codemasters titles throughout the US. Codemaster’s brands include Colin McRae: DiRT, Overlord, Race Driver: GRID and Operation Flashpoint. In 2007, Codemasters took a $98.5 million investment from Goldman Sachs.      
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| iPad Day In Numbers: 300k Devices Sold, 1 Million Apps And 250k iBooks Downloaded Posted: 05 Apr 2010 05:42 AM PDT
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| Swedish Company, People Of Lava, Creates An Android-Based TV Posted: 05 Apr 2010 05:37 AM PDT  Remember Android? Don't worry. You'll remember next week once this whole iPad thing blows over. Anyway, a Swedish company called, inexplicably, People of Lava has announced what they're calling and Android-based TV. The TV, called the Scandinavia, comes in a 42-inch configuration that costs about $2,500. The Scandinavia Android TV - which will first be released in a 42" version, followed by 47" and 55" - is built without compromises. It features top-of-the-line components and is carefully put together by hand to ensure the kind of quality that customers expect from a People of Lava Full- HD LED TV set. Its Android platform and internet capabilities provide a wide range of functionalities, including: - Out of the box Android TV applications such as: - YouTube, Google Maps ,Weather, Time, Calendar, Internet Browser - Downloadable Apps, both free and from coming App-store: - Facebook, Twitter, Email and more... - Internet connection - USB connection 
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| Former AOL, Experian Executives Join Rubicon Project Posted: 05 Apr 2010 05:25 AM PDT
The LA-based company has hired Ben Trenda, formerly VP of Global Partnerships at AOL, as Vice President of U.S. Demand and Eric Matza, former Vice President of Product Management at Experian, as Director of Product Marketing. Former Product Marketing and Brand Development Director at Rubicon Project, Marwan Soghaier, meanwhile has moved on to become the new VP of Marketing and Product at online and mobile marketing firm mobileStorm. At Rubicon Project, Ben Trenda will be in charge of relationships with ad networks and other third-party sales channel partners to ensure they have access to targeted premium inventory and audience segments. He has quite a bit of experience under his belt: prior to AOL, Trenda led a West Coast sales team for Advertising.com, and before that he held roles in the Strategic Alliances group at Yahoo and before that, in sales at Overture and GoTo. Two things are worth noting: this isn’t the first AOL exec to make the switch to Rubicon Project: the company recently appointed AOL / Platform A vet Oli Whitten to oversee and develop relationships with online advertising networks across Europe. AOL also partners with Rubicon Project in continental Europe. Eric Matza, who also worked at Yahoo as manager of targeting infrastructure initiatives for display advertising and email marketing, will be responsible for bringing new advertising technology and data products developed by Rubicon Project to market. The Rubicon Project launched its ‘network of ad networks’ in 2007, and envisions ‘automating the $65 billion global online advertising industry’. The company has raised $42 million in funding the likes of Clearstone Venture Partners, Mayfield Fund, IDG Ventures and GE/NBC Universal's Peacock Equity Fund. Among its clients are big names like NBC Universal, Gannett and CareerBuilder, and the company claims to optimize more than 45 billion ads each month, reaching 500 million unique Internet users. The company recently outlined its strategy going forward, and apparently its proposition is attractive enough to be able to recruit some serious talent.      
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| Concerned About Its New Privacy Policy, German Minister Threatens To Quit Facebook Posted: 05 Apr 2010 04:52 AM PDT  German Consumer Protection Minister Ilse Aigner has written an open letter to Facebook CEO Mark Zuckerberg, expressing her concerns about Facebook's plans to further relax data protection regulations on the social networking site. She refers to the recent tweaks the company made to its privacy policy in anticipation of new features that will likely be launched at Facebook's upcoming F8 developer conference. Admittedly, there are a number of questionable passages in the new privacy policy: TechCrunch's Jason Kincaid has talked at length about some of the issues in this post, and a later one in which he foresees a 'privacy wake-up call' for Facebook. Nevertheless, the ending of the open letter is somewhat amusing. "Should Facebook not be willing to alter its business policy and eliminate the glaring shortcomings, I will feel obliged to terminate my membership," writes Aigner. Curious to see how Facebook will respond to her threatening to quit the social network - we've contacted the company to find out. You can read the English version of her letter in its entirety after the jump, courtesy of Spiegel Online:
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| Google To Buzz Users: Are You Sure You’re Not Oversharing? Posted: 05 Apr 2010 03:08 AM PDT
Two days after launching (prematurely), Google tweaked the product to make it clearer for new users what was going on behind the scenes when they click the ‘Buzz’ tab, and they made even more changes two days after that. But those changes only affected new users, and not the – reportedly – millions of people who gave it a whirl in the first four days after launch. Later today, Google will start prompting all existing users to review their existing privacy settings upon launching the service. The company will soon publish a blog post in which they admit they “didn’t get everything right” and confirm that they will gradually start presenting the following screen to users who click the ‘Buzz’ tab over the course of the day:
This page essentially highlights users’ current Buzz settings, which they can promptly confirm or change. It lets users view and edit the people they’re following as well as the people following them, choose whether they want those lists appearing on their public Google profiles, and modify any of the sites connected to Google Buzz (e.g. Flickr, Twitter and Google Reader). The news comes shortly after multiple lawmakers had asked the U.S. Federal Trade Commission to investigate Buzz for breaches of consumer privacy. But while some are now implying that Google is letting users reset their privacy settings to get Congress off its back, the truth is that Google had already stated this was coming on February 13, when it blogged:
Of note is that Google has also set up a dedicated YouTube channel for Google Buzz, including eight videos explaining the basic concept and specific features. In an amusing twist of irony, 7 out of 8 videos are currently set to ‘Private’ and cannot be viewed yet.      
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| Source: Elevation Partners Got About 1% Of Facebook For $90 Million Posted: 05 Apr 2010 02:11 AM PDT
Private sales occurring on SecondMarket at about the same time were closing at higher prices, in the $25/share range. As we wrote in the first post, Elevation Partners is clearly counting on this investment to offset losses on investments in Palm and Forbes, and save the fund:
The new pricing info, though, is better news for Elevation Partners. DST paid a $10 billion valuation for Facebook in May 2009, albeit for Preferred Stock with additional rights over the Common Stock that Elevation Partners now owns. And DST has also dollar cost averaged their price per share down with additional Common Stock purchases at a $6.5 billion valuation. In a couple of years this will likely look like a very smart, albeit somewhat odd, investment by Elevation. Odd because venture capitalists rarely buy common stock in startups at market prices. Smart because they’re likely to make a very good return on the investment anyway. And who knows, if some of their other unannounced deals are winners, too, the fund can get some of its shine back.      
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| Trouble In Paradise: iPad Users Complain Of Wifi Issues Posted: 05 Apr 2010 12:00 AM PDT
Count me in as someone who’s having iPad Wifi issues as well. The device works fine near the router, but on the other side of the house, nada. But my Macbook pro and my Nexus One and other various devices I’ve brought into the house pick up wifi just fine in that area. Early Macbook Air users complained of Wifi issues, too. I eventually abandoned the computer because the only place Wifi worked was in the Apple store, even though I was using Apple networking equipment at home. My understanding of Wifi issues on devices, particularly cramped devices like the Macbook Air and iPad, is that it’s usually a hardware/design issue and something that can’t be fixed via a software patch. I hope that’s not the case with the iPad, because faulty Wifi would make this a very unattractive device. Particularly if they run into Macbook Air type problems. As one commenter on the Apple site said, “Not spending $500 on something I cant even use. Its going back tomorrow.”      
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| NSFW: It’s Easier To Run, And Other Lessons That Entrepreneurs Can Learn From ELEW Posted: 04 Apr 2010 08:53 PM PDT
Dressed in a black suit and white shirt – cuffs open and flapping at his wrists – he sat in front of a grand piano and prepared to play his version of ‘Going Under’ by Evanescence. Despite the apparently mundane choice of music, the audience had been told to expect something special. And so it began. For the first full minute of his performance, ELEW didn’t touch a single key. Instead he reached inside the lid and began plucking and jabbing and pounding the piano’s strings. The sound was one that nobody in the auditorium had ever heard before. Even the piano seemed surprised at what it was capable of. Then came the keys – and with them, ELEW’s transformation from man to – well, something else; his face contorting along with every note: eyes first closed and then bulging, brow furrowed, teeth gritted in a kind of quiet rage — not so much playing the music but beating it into shape. The performance lasted ten minutes; short by ELEW’s standards – he’s been known to play at this pace for an hour or longer – and when it reached its climax the audience gave their verdict. A standing ovation from one of the world’s most hard to please crowds. In the months that followed, ELEW went from virtual unknown to solid circuit fixture as YouTube clips of his TED performance went viral. For some reason, Silicon Valley became particularly obsessed with his work, and for a few months during the middle of last year, it seemed like you couldn’t attend a tech event in San Francisco without catching a performance by ELEW and his piano. In fact, it was at one such event – a fundraiser for DNA Lounge, organised by Zivity’s Cyan Bannister – that I first saw him play, and ended up turning over an entire installment of my Guardian column to how I’d been reminded that virtual experiences could never beat the visceral rush of this kind of amazing live performance. So gushing was the fanboyism of my (I admit, generally somewhat cynical) column that ELEW’s manager asked if I’d expand on it in a short essay that could be used to promote his forthcoming debut album. (Disclosure: I was paid for my time. Although, as you’ll surmise if you read my original column, I’d have gladly given it for free). So what does this all have to do with TechCrunch? Why – you might very well ask – is this news? Well. As part of the research for the essay, I spent some time talking to ELEW about his apparent overnight success. What quickly became clear was that – as is almost always the case – there was almost nothing ‘overnight’ about it. But more interestingly, I realized is that ELEW’s story isn’t that of an artist at all. Not really. In fact it’s the story of an entrepreneur. Moreover, it’s a story that offers several valuable lessons for anyone – entrepreneur, artist, or otherwise – who wants to be ridiculously successful in their chosen field. So, given that I spend half my life talking about my own failures as an entrepreneur, and given that it’s Easter – a holiday celebrating new life and all that crap – it seems appropriate to take a week off from cynicism and shift into inspiration territory. Or perhaps it just seems like a good opportunity to be paid twice for the same research. Feel free to decide in the comments. Meantime, on with the first lesson…
Three years before his TED performance, ELEW didn’t exist. What existed was Eric Lewis; a supernaturally gifted jazz pianist who had won the Thelonious Monk Piano Competition at age 23 and was playing regularly with – amongst other famous names – Wynton Marsalis and the Jazz at Lincoln Central Orchestra. And yet, for all of his accomplishments, Lewis was trapped. His preferred performing style just didn’t fit in the jazz world. “I was less into a swinging form of jazz, and more into a rock form of jazz… but I was attempting to drive myself to exciting heights, while playing behind horn players” he deadpans. “I was called ‘crazy’ and ’show off’ and all those other cliches. People said I was difficult to work with.” Lewis responds to the criticism with a cliche of his own: "Never try to teach a pig to sing; it frustrates the teacher and annoys the pig.” Lewis knew that to be successful, he'd have to turn his back on what he had previously been his career for life. So he did.
“I’d always believed in the system: work hard, become accomplished and get a record deal with a jazz label, that’s how it was supposed to work.” But it didn’t work. “I realized that the whole system was corrupted, and not in my favor. So I closed my head to that system. It was like breaking up with someone after a long relationship. I completely restructured my reality and started thinking – strictly by numbers – how to survive as a piano player. I looked at people like Kenny G, Dave Sanborn – people who are called ‘heretics’. I looked at what they’d done, but I also applied the thinking of a chess hustler.” Zugzwang. That’s the word Lewis uses. It’s a German word – literally ‘a compulsion to move’ - used in chess to describe the point where a player finds that, whatever move he makes, he is going to be at a disadvantage. But while a chess players is trapped within the confines of the board; Lewis realised that there was nothing stopping him from changing his game. “I decided to fully embrace the rockstar ethos they’d tried to remove. And by rockstar ethos I mean what is known in some circles as ‘fun’.” It was at that point that Lewis stopped thinking like an artist and started thinking like an entrepreneur. Realising that if he wanted to be successful he’d need to turn himself into a brand, he started cramming every branding book he could find; books with salesy names which insist that “it pays to be a winner” – which, Lewis points out, also happens to be one of the slogans of the Navy Seals. To most artists the idea of creating art using the principles of business – let alone those of the Navy Seals – would sound hideous but thinking commercially was what lead Lewis to make two significant decisions. First was his personal reinvention. Eric Lewis became ELEW, a name which Lewis admits he chose because “there were many Eric Lewises on Google search results, but I was the only ELEW.” The name, though, reflected an entirely new persona: “before then I felt like I’d been hiding my real self under a cloak – just a tease”.
The second result of ELEW’s hustler-thinking was the concept of ‘Rockjazz’. “I wanted to be a one man rock band; using the piano to recreate the sound of the electric guitar; the vocals; the bass. Like how Beethoven and Bach were trying to reflect and emulate what they saw.” He pauses. “Except with them, of course, they were trying to emulate bees and things of that nature.” Lewis acknowledges that others have tried to cover rock music in a jazz style before but “the fact is they didn’t care enough about what they were doing to give it a new name. That says a lot.” This habit amongst jazz musicians of refusing to take rock seriously particularly irked him. “They are too concerned with trying to be clever, adding layers of esoterica that you have to peel away to get to the fun.” With Rockjazz, the fun is first. Indeed – when I talked about ELEW with other professional musicians, all of them took pains to explain how much skill is required to produce his sound. They were concerned that there’s so much fun in ELEW’s music that audiences might not realise how talented he is. They needn’t worry. Regardless of whether audiences recognise ELEW’s skill, though, they certainly recognise that his style is something they’ve never seen before. Inevitably he’ll attract imitators but that’s fine – when people think of RockJazz, they’ll still think of ELEW.
And so began the process of turning his concept into actual performance, a process that started with a chance encounter and a harsh realization, which will be familiar to every traditional business person who suddenly found their industry threatened by the Internet. “I met a guy who worked with Coldplay, and he told me ‘we should get you to do a kind a dueling pianos with Chris Martin’. I just stared at him… who is Chris Martin? Who are Coldplay? I literally didn’t know. The guy looked at me like I only had half a brain. But he didn’t budge; didn’t feel the need to explain. Here was me with all my reputation and experience in the jazz world – I’ve played with Cassandra Wilson and Elvin Jones, people like that – and I realised none of it mattered. I thought ‘I’m in the big world now, no one knows who all these jazz people are. I’m away from my jazz world now and I’m back on the bottom.’” Thus came the harsh realization. “That’s when I knew there was no place for ego anymore, just a three year process of realization. The realization that I suck. Forget audiences saying ‘wow’. No. I suck. My new masters were sixteen-year-olds with guitars. They have their own rules and authority – they have relevant information that I don’t have, and that I needed to learn. It’s their way or the highway. I felt like the 30 year old guy who suddenly has a 19 year old boss. I can either disrespect the guy or I can give him the service and dedication and respect that he deserves. There’s the lyric in Smells Like Teen Spirit: “I found it hard, it’s hard to find / Oh well, whatever, nevermind.” That’s how I felt. I can’t convincingly render surfer rock. Poor Eric… oh well, whatever, nevermind. I had to learn. My hands cramp when I try to play the opening to Lights and Sounds… oh well, whatever nevermind. These are growing pains. I could quit or I could suffer through the muscle process and learn. And, well we know how that went…” And so we do. Last May, ELEW accepted an invitation to perform at The White House for the President and First Lady. His album followed a few months later, comprising tracks which, surprisingly given that the only thing missing from ELEW’s performance is vocals, were chosen in large part for how their lyrics reflect his journey. From the Killers’ Mr Brightside – “A song about betrayal… I felt betrayed by the jazz world” – to Easier To Run by Linkin Park – “it is easier to run.. but I knew it would be worth it, and that that we were all going to have fun in the end”, ELEW makes his final lesson clear: “After years of feeling like a square peg in a round hole, now finally I’ve found where I am. That’s what matters.”
     
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| Top VCs Debate Rising Startup Valuations [Video] Posted: 04 Apr 2010 07:24 PM PDT
The venture capital valuations for still-have-that-new-car-smell startups like Quora, FourSquare, Blippy are reaching unprecedented levels, and we wanted to find out why. Top VCs Marc Andreessen, Ron Conway and David Hornik came by the TechCrunch offices to debate the issue. Four month old Blippy is worth around $38 million. Quora, still in private beta, is valued at around $86 million in its most recent round. And Foursquare will be worth $80 million or more when it closes the round it’s negotiating now. These are all young, basically pre-revenue startups. A year ago these valuations would have been unthinkable. So what’s driving the feeding frenzy? The IPO market is still mostly closed to startups, and most acquisitions are still in the low tens of millions of dollars. There’s no clear profitable exit for VCs who invest at these valuations.
He also says that the hottest deals tend to have valuations at 4x what comparable startups can command – meaning some intangible factor pushes the valuation of a startup way beyond what the numbers will support. Hornik also says that history has proven some crazy valuation deal to be very smart in hindsight. He uses Greylock’s investment in Facebook at a $500 million valuation as an example. At the time a lot of people said they were crazy. Now, it looks like the deal of the decade. “Silicon Valley has a very short term memory,” says Hornik, saying that overpriced deals that eventually go south are quickly forgotten. And smart deals tend to be remembered. Conway says that venture capitalists need to do their due diligence. He invested in Google at a $75 million valuation in the late 90s, and the company had no revenue and no business model yet. But the search engine was so exceptional, he says, that the investment made sense when they looked deeply at the team and the product. Obviously, he was right. Good diligence plus good deal flow equals a good portfolio, he says. What’s most interesting about the talk is that none of these guys seem particularly concerned with rising valuations. Getting a piece of the hot deals seems to be of crucial importance. This was a 30 minute conversation and there were lots of great side discussions as well, such as how they deal with entrepreneurs who want to sell out of a startup instead of going the distance. And near the end I hounded Andreessen on when Skype might go public. The full transcript is below. Mr. MICHAEL ARRINGTON: This is Mike Arrington. I am here with Marc Andreessen, Ron Conway and David Hornik. Welcome, guys. Mr. DAVID HORNIK (Partner, August Capital): Thanks. Mr. MARC ANDREESSEN (Co-Founder, Andreessen Horowitz): Hi, Mike. Mr. RON CONWAY (SV Angel): Hello. Mr. ARRINGTON: Just quick bios. Marc, you co-founded Netscape and I’ll say brought internet to the masses in the mid 90’s. You also founded Opsware, which was sold at HP in 2007 for 1.6 billion. Mr. MARC ANDREESSEN: Yup. Mr. ARRINGTON: And you co-founded Ning. In 2009, you co-founded Andreessen Horowitz, a new venture fund and you’ve made a big splash already with a number of investments including Skype and Zynga and that seems to be your full-time job now as a venture capitalist. Mr. ANDREESSEN: It’s a big – it is a very big deal and we’re having a lot of fun with it. Mr. HORNIK: And you enjoy quiet walks on the beach. Mr. ANDREESSEN: I really do and I like puppy dogs and ice cream. Mr. HORNIK: Excellent. Mr. ARRINGTON: And you brought doughnuts to the office… Mr. ANDREESSEN: I did. Mr. ARRINGTON: And made you an instant hit in the TechCrunch offices. Ron Conway, who didn’t bring doughnuts today, is the most… Mr. CONWAY: Sorry, cupcakes tomorrow. Mr. ARRINGTON: Is the most successful prolific angel investor in Silicon Valley. I think – I think both of those are actually true. You’re the most successful – arguably the most successful, clearly the most prolific. You – one of the first investor… Mr. HORNIK: He'll trade though. Mr. ARRINGTON: Well, one of the first investors in Google and pitching your startup for Ron Conway – and your team – is clearly a right of passage in Silicon Valley. Would you guys… Mr. CONWAY: Yup. Mr. ARRINGTON: Your investments include just about every successful startup you’ve ever heard of. Name a few? Mr. CONWAY: Oh, PayPal, Ask Jeeves, Way Back. Mr. ARRINGTON: Google. Mr. CONWAY: Google. Facebook. Mr. ARRINGTON: Facebook recently. Mr. CONWAY: Twitter. Mr. ARRINGTON: All of them literally. Mr. CONWAY: Zappos. Great – great, great companies. Ad Mob… Mr. ARRINGTON: Any of the big ones you’ve missed? Mr. CONWAY: SalesForce.com, Zynga. That list probably is as long but… Mr. ARRINGTON: David Hornik is a partner of August Capital. Your investments include Ohai, Six Apart, StumbleUpon, VideoEgg, Blippy, which we’re going to talk about in a little bit – and Gravity. Another investment, Aardvark, was recently acquired by Google for how much, $6 million? Mr. HORNIK: I don’t know that was ever reported. Mr. ARRINGTON: You guys are a great group to talk about the main thing I want to talk today, about – which is freaking Silicon Valley out – which is these valuations on these private companies. So, Blippy is your investment, you invested a few million dollars at a $38 million post is my understanding. Is that confirmed or… Mr. HORNIK: No. But… it’s a theory. Mr. ARRINGTON: It’s a theory. Mr. HORNIK: Theory. We’ll go with it as a theory. Mr. ARRINGTON: Another startup Quora founded by ex-Facebookers, 86 million rumored valuation. Haven’t even really launched it yet. Mr. CONWAY: Is it pre or post money? Mr. ARRINGTON: That’s post money to my understanding, haven’t even really launched it yet. In fact they only went into private beta in January. FourSquare, the rumor is 80 million-ish. Actually, Marc, you’re rumored to be involved in that deal and maybe we’ll talk a little bit more about that. FourSquare probably has somewhere between five hundred thousand and a million users but not much in the way of revenue yet. And if you go back a little bit, you’ve got Zynga and Facebook and Twitter all in the billion plus range as well. I think even Ning was valued at over a billion in its last round. Mr. ANDREESSEN: No. Mr. ARRINGTON: Half a billion Mr. ANDREESSEN: That would be dramatic. Mr. ARRINGTON: It was valued at half a billion. Mr. ANDREESSEN: If true, but not true yet. Mr. ARRINGTON: What’s driving this? I mean, are you guys alarmed or not alarmed? Is this – what’s going on? Mr. CONWAY: Well, I think it’s turning from a buyer's market to a seller’s market for the right company or for the right idea. Mr. HORNIK: I guess, the question is why though? I mean, in fact, if anything there is less money, the decreasing amount of money, the market is getting tighter, so it shouldn’t be, right? It should be a buyer's market. It shouldn’t be a seller’s market. Mr. CONWAY: VCs have a lot of uncalled capital. Mr. HORNIK: But we always have. Mr. CONWAY: VCs have plenty of – there’s plenty of money out there. Mr. ARRINGTON: What’s different now? It’s just there are as many good deals. Marc, you’re in the FourSquare deal. At least you’re rumored to be one of the four firms in that. Let’s assume that was true without you confirming or denying the rumors. What makes you interested in a startup that young and small at that high of a valuation were you to be in it, in that deal? Mr. ANDREESSEN: Yes. So, obviously, I don’t want to talk about a deal that we’re not actually in, or you know, investment that is not yet, that is – where the company's raising money. But, in general the theory is that every year there’s a small number of companies that have the potential to be incredibly important, incredibly important companies. Those are also the companies that have the potential to be very financially successful and to me like, important and financially successful in this industry turns out be the same thing. Those companies are started by the founders who have the ability to build big, important and successful companies. If you look at the math over a 20-year or 25-year period, Andrew Rachleff who is a good friend of all of us from Benchmark, did the analysis on this. Well, actually, in Stanford Business School. If you look out over time basically what you’ll see at the long run is that every year the tech industry creates about 15 companies that ultimately will end up doing 100 million in annual revenue or more and those are the companies that are the big important franchise companies such as the Googles and Salesforces and Facebooks and so forth. And you know, those companies are the main event. And so, when you know as an investor, when you think you have an opportunity to invest in a company that has that kind of potential, you know, if you’re the kind of VC that wants to invest to those kinds of companies, then, those are the types of companies that you go after and those companies are naturally going to be A, in demand. And B are, you know, merit the prices, now, assuming they work. You know, the nature of VCs is sometimes they work, sometimes they don’t, and the nature of startups is sometimes they work and sometimes they don’t. But there were plenty of investors all through Silicon Valley who passed on Google due to the valuation, there are lots of VC’s who passed at 30, 35, 43, you know, who now very much wish they can go back in time. And we found out there’s investors who passed on Facebook at similar valuations and wished they could go back in time. So you know, when you think you have one of those then it makes sense to pay a rational, but a meaningful price. Mr. CONWAY: Especially since the day you invest in that company after you’ve done the due diligence, after you’ve competed for a high priced round, you really do believe that they’re going to be one of those 15 companies that’s going to do a hundred million a year. Mr. HORNIK: So, I mean, that is precisely the dynamics, right? Ultimately it is. You can talk yourself into pretty much any valuation. You can march your way up to… because at the end of the day if it’s the multi-billion dollar outcome, then having done it, you know, done around it a hundred million pre- is sort of irrelevant. The difference between 50 million and a hundred if it’s the same multi-billion dollar company is nonexistent. The only problem is, do you get it right? And if you do that every time, right, if you’re certain of that every time, will you end up with a successful portfolio? And that’s, I think that’s the math that everybody needs to do because I think, it’s very simple to say, gee, when David Sze invested out 500 million dollar valuation in Facebook everyone thought he was insane and he’s like, ah, you know. I mean there were lots of justifications for it that weren’t this is going to be a good investment. And then, it turned out, it was a monumentally good investment in all likelihood, a monumentally good investment. But if you carry that to the extreme, we will all invest at any price. And then, the question is, which are the good deals? I mean, if there was a slightly larger spread on that, maybe then we could keep prices down. We all seem to agree on what the things are that might be those interesting deals and that’s driving up the price. Mr. ANDREESSEN: Well, actually let me actually quibble with one part of that… Mr. HORNIK: Yeah. Mr. ANDREESSEN: Which is that, we’re finding, you know, we’re fairly early to actually be a professional venture capitalist so, you know, limited data on this but we’re finding just anecdotally in the market as much as a 4x spread in valuation and multiples on any factor you try to look at – correlating to hotness. Now, by the way, that doesn’t mean that you should not invest in you know, in the super hot deals if they really are having in a little bit high quality. But you know, for everyone of these that’s on your list, you know, we’re seeing another set of what we think are very – let’s say comparable – quality companies and nobody knows about them just because they’re not hot, they are not covered on TechCrunch and they’re not just talked about all that much. For a fourth of the price. Mr. HORNIK: So, we should only do those. Mr. ANDREESSEN: Well. Mr. HORNIK: Right. And so, basically, if they’re as likely to be successful, if there are in fact as high quality, but are not hot, then the logical thing to do is never invest in a hot company. Mr. ANDREESSEN: Well, I don’t think that follows because the reality is that there is a very small number of companies that have the ability to actually get to the point of… Mr. ARRINGTON: How much is the marketing play a role? You invested in Skype, right off the bat – right after the launch. From a marketing standpoint it’s like wow, Marc is going – is a player, he's not messing around… Mr. HORNIK: Because before that you were a schmuck… Mr. ANDREESSEN: Amateur. [Laughter] Mr. ARRINGTON: And Zynga as well has a very high valuation. Mr. ANDREESSEN: So, we made both investments because we think we’re going to make a lot of money on that. Mr. ARRINGTON: Yeah. Mr. ANDREESSEN: Skype actually did not work quite the way that we’ve been talking about. The initial reaction was, what a bunch of freaking idiots to invest with in thing with that litigation, right? The initial reaction was. Mr. ARRINGTON: But actually, you worked all that out in the background. Mr. ANDREESSEN: Well, we knew we’d be able to work it out – or we had very high confidence that we’ll be able to work it out. But actually, the initial reaction was not, not what you would refer to as positive. Mr. ARRINGTON: Well, TechCrunch is actually highly positive on that. Mr. ANDREESSEN: You guys might have been. We’ve got a tremendous amount of phone calls from people including some of our investors. They were like, oh, my god! Mr. ARRINGTON: We might have asked a couple of questions. Mr. ANDREESSEN: Well now it’s working out fantastic. We are very confident that our investors are going to be happy with the outcome but, you know… Mr. CONWAY: Because you did good due diligence. Mr. ANDREESSEN: Well, we’ve studied the situation, yeah, extensively. I mean, we spent a long time, and a lot of effort. You know, making sure we understood what we’re getting into. Mr. ARRINGTON: But, you know Zynga… Mr. ANDREESSEN: But you know I will qualify that. I will say that was a provocative investment, you know, when those work, it’s great… Mr. ARRINGTON: There also was all this drama around it as well, but from a marketing standpoint, you’re saying, it was actually neutral to bad because people were questioning your… Mr. ANDREESSEN: I would say it started out bad and now it’s a good, yeah, you know… Mr. HORNIK: But I think you have a point, I mean, you said, they’re great when they work but if it turns out it doesn’t…. And it’s interesting because, I actually think that Silicon Valley has a very short memory. And I remember this thing called 'It' that turned out to be a Segway. You know, it’s like, wow, that thing’s going to be – hype hype hype! – yet… oh, it’s a Segway. You know, it’s like a replacement for people who don’t want a bike. You know, but Silicon Valley doesn’t care, we'll moved on… Mr. ANDREESSEN: Although it helped in that case. John Doerr you know – one of the legendary great all time VCs, invested in Segway and Google and right around the same time, right around the same terms, right around the same amount of money. Mr. CONWAY: He knows how to hedge. Mr. ANDREESSEN: You know, and one of them, you know, made his LPs, you know, I don’t know five or 10 million dollars and the other one lost them 25 million. So you know. Mr. ARRINGTON: Speaking of hedging. What with this rumor that we – actually we’ve just confirmed it now – with the Facebook investment by those guys – what’s their names? Mr. HORNIK: The Russian guys. Mr. ARRINGTON: Elevation Partners, $90 million in Facebook we hear, at a 20 billion dollar valuation. Are you guys in this as well? Mr. HORNIK: No. I heard nothing. Mr. ARRINGTON: Nothing? Mr. CONWAY: Well, I’m an investor in Elevation, but I swore myself to confidentiality… Mr. HORNIK: Is this direct or… Mr. ARRINGTON: We’ve heard they’ve invested in the secondary market. They bought $90 million of stock in secondary market. That might be their hedge and the rest of their funds which include some of, the companies aren’t doing quite so well. Mr. CONWAY: It depends on the valuation they paid. Mr. HORNIK: at 20 billion? That’s the hedge? Mr. ARRINGTON: That’s what we’ve heard, yeah. Mr. ANDREESSEN: I can’t comment. Mr. CONWAY: Says Facebook. Mr. HORNIK: That makes sense. Mr. ANDREESSEN: I just can’t talk about it. Mr. ARRINGTON: Because you’re conflicted eight different ways. Mr. ANDREESSEN: Yeah, well, no, specifically I’m on the board of Facebook, so I think that would be inappropriate but… Mr. HORNIK: Do we want to talk today about the SEC and Facebook or should we do that in another future show, Mike? Mr. ARRINGTON: I’d love to talk about that. Mr. HORNIK: We’ll do that in the future. Oh, well, that’s not fair to Marc. Mr. HORNIK: Well, come back at some other time… Mr. ARRINGTON: Well, Marc, you did bring the Facebook financials with you. Mr. ANDREESSEN: Yeah, they’re in my back pocket… Mr. HORNICK: They’re under the whatever, the doughnuts. Mr. ANDREESSEN: (unintelligible). Mr. CONWAY: They’ll be up on the screen as a commercial break. Mr. ANDREESSEN: Well, I’ve brought them Ross Perot style on little cards to hold up to the camera. Mr. ARRINGTON: Let’s do it. Mr. ANDREESSEN: Well, oh darn, I forgot. Mr. ARRINGTON: Ron, you’ve invested in Google in what valuation? Mr. CONWAY: Seventy-five million pre with KP and Sequoia. Mr. ARRINGTON: And that worked out very well? Mr. CONWAY: It worked out very well. But at the time it seemed like a lofty valuation, if you did not do your due diligence. But at the time we had… Mr. ARRINGTON: What year was this, ‘99? Mr. CONWAY: 1998. Mr. ARRINGTON: Yeah. Mr. CONWAY: Yeah, I think ‘98. Mr. ARRINGTON: So, they don’t have monetization. I don’t think they had any revenue at all. Mr. CONWAY: No, they were – Larry and Sergey were very honest and said, you notice, that at the end of the presentation there is no financials and nothing about a business model because we don’t have one. Mr. ARRINGTON: Yeah. Mr. CONWAY: And… Mr. ARRINGTON: And, so they hadn't monitized well till then. They haven’t come up with this model of monetizing it so. Mr. CONWAY: Well, Ask Jeeves had and we had just taken Ask Jeeves public. Mr. ARRINGTON: OK. Mr. CONWAY: So… and Ask Jeeves was a very lofty IPO, So, the minute we saw the Google Search Engine, I’ve took one of my partners with me and I talked to Larry and Sergey while he played with the engine. And I had always heard that based on page rank and relevancy, that was what, Larry and Sergey were talking about. I said, wow! Those are pretty interesting criteria to be searching by, you know, page rank and relevancy. If it’s as good as they’re saying it is, I want to invest in this. Mr. ARRINGTON: Yeah. Mr. CONWAY: So, my partner was doing searches that he had thought about before. And I said, you know, once you do the searches against Ask Jeeves, if it’s good, give me a nod and we’ll keep that meeting going until we come to some closure. Mr. ARRINGTON: So if you want this… Mr. CONWAY: Because KP was already in the deal. Mr. ARRINGTON: Yeah. Mr. CONWAY: Sequoia had not been contacted yet. Mr. ARRINGTON: OK. Mr. CONWAY: And I helped with that because they wanted Sequoia in the deal… Mr. ARRINGTON: That’s the first time they built investors. Mr. CONWAY: …for the Yahoo relationship. Mr. ARRINGTON: Yeah, is that right? Mr. CONWAY: In a while, it would fall in between. Mr. ARRINGTON: So, my point is this, you’ve invested, early… made a lot of money. All these companies… Mr. CONWAY: But we did diligence. It’s all about good deal flow… Mr. ARRINGTON: Sure. Mr. CONWAY: Good diligence usually equals a decent portfolio. Mr. ARRINGTON: But you tend to get in really early even, you know, regardless of the due diligence. Now, all these companies – I mean, are you an investor, you’re in FourSquare, right? Mr. CONWAY: Yeah. Mr. ARRINGTON: You’re in Blippy, right?. Mr. CONWAY: We sure are. Mr. ARRINGTON: You work in Zynga, but you were in… what valuation do you invest in Facebook? Mr. CONWAY: Well, in Facebook, I’m actually an adviser, so… Mr. ARRINGTON: Oh, you didn’t put any money then. Mr. CONWAY: It’s common stock. Mr. ARRINGTON: That’s OK. Mr. CONWAY: It says at the time, Marc thought I did a lot of work. He did not want me to pay for the stock. Mr. ARRINGTON: You’re in Twitter? Mr. CONWAY: That’s exactly what he said at that time. So, why should you have to pay for this stock when you help? Mr. ARRINGTON: You’re in Twitter? Mr. CONWAY: Yes. Mr. ARRINGTON: So other than Zynga and are you in Quora? Mr. CONWAY: I’m not going to comment on that. Mr. ARRINGTON: That’s interesting. Mr. CONWAY: I’d like to be in Quora. Mr. HORNIK: And there’s the comment. Mr. CONWAY: Who wouldn’t like to be in Quora? Mr. ARRINGTON: OK, so… Mr. HORNIK: And there’s the negotiation. Mr. ARRINGTON: Four of the six companies – even putting Quora out – that – are now in sort of big valuatiobs. You got in at what valuations here? A few million dollars at most, right? A few hundred thousand dollars? Mr. CONWAY: Well, Twitter, Twitter, Twitter funny enough. Ev Williams was the first angel in Twitter. Ev funded Twitter for the first couple of million bucks. So Twitter, the first round that any investors were in was really like a series A or series B. So Twitter was more like 20 million when the first investors outside came in. Mr. ARRINGTON: Their last round was at a billion, right? Mr. CONWAY: Yes, I think they’re worth every nickel of it. Mr. ARRINGTON: So, are you – do you ever sell in these big rounds. I mean, these guys are just getting in to some of these bigger deals. Are you – do you ever sell on those rounds or do… Mr. CONWAY: I don’t. I like to see him through to – whatever the liquidity is that the founder gets his money is when I want to get my money. Mr. HORNIK: Well, the founders… Mr. CONWAY: I had criticized people for doing that. I – but I like to see it through. Mr. HORNIK: The founders are getting plenty of money in these secondaries, right? I can’t speak to all of these, but many of these deals, the founders are getting… Mr. CONWAY: Well, Evan Williams hasn’t sold as far as I know and Mark Zuckerberg hasn’t sold. I’m talking about the founder and the visionary. Those people typically want to see it through, you know, through to the IPO or an M&A deal. Mr. ARRINGTON: Is Crowley trying to take money out of FourSquare? Mr. CONWAY: I hope not, but I don’t know and I – but I highly, highly doubt it. Mr. ARRINGTON: He’s actually sealed his lips together now. Mr. CONWAY: I highly doubt it based on the quality – based on the quality of that entrepreneur, I’d be shocked if he was… Mr. ANDREESSEN: He’s a very high quality entrepreneur. Mr. ARRINGTON: And Blippy? Blippy, those guys are… Mr. HORNIK: They are high quality entrepreneurs. Mr. ANDREESSEN: They are, by the way – those guys are great. Mr. ARRINGTON: But you passed on the deal. Mr. ANDREESSEN: We didn’t do that deal but I think it’s a fantastic deal. Mr. ARRINGTON: It’s just not 38 million dollars fantastic. Mr. ANDREESSEN: If I were an LP… put it this way… if I were an LP in August, I’ll be happy they did the deal. Mr. ARRINGTON: If you were an LP in August, how happy would you be if the Aarkvard guys sold out at 60 million dollars? Mr. ANDREESSEN: Well, so, I don’t want to second guess anybody’s individual decision. I would say in general, I – in general, I’m in business to help people build big important franchise companies. So my preference is that companies go the distance. Mr. ARRINGTON: And going the distance, isn't selling to Google for…. Mr. ANDREESSEN: Well, going the distance is to basically find out how big your market really is. If it turns out that it’s big, go get it, like go win the market. If it turns out the market is not that big, which you discover in a lot of these things at a certain point in time, that a market is just not that big, in that case, it didn’t make sense to do a strategic transaction, put it in the hands of somebody who has maybe more market throwaway, which is actually what we did with (unintelligible). But in general, we’d like to help people build franchises, the kind of entrepreneurs we like are the ones who build franchises. So, in general, we prefer that people persist over a longer period of time. Mr. CONWAY: But if an entrepreneur ends up wanting to sell, you can’t step in the way of it. Mr. ANDREESSEN: Yeah, you have to – you have to help. You have to put your weight behind helping them do that because without the entrepreneur, you wouldn’t have a company… Mr. CONWAY: Right. Mr. ARRINGTON: Yeah, but isn’t it a sort of – almost a bargain made for the entrepreneur and the VC where, you know, you kind of have an agreement at the start, that you’re going for something and not going to sell at 60 million? Mr. CONWAY: You try. You try. Mr. ANDREESSEN: In general, you try to but, you know, but sometimes things go sideways for one reason or another. Mr. CONWAY: I think Angels are different though. We actually invest in companies where we actually have a discussion with the entrepreneur where I will say this is probably a 50 or a hundred million dollar business. Mr. ARRINGTON: Yeah. Mr. CONWAY: The realistic market size. Do you understand that your liquidity is probably going to be an M&A event? The entrepreneur says yes and this is the size of market that I want to go after right now. So we’ll invest knowing that this is probably going to be an M&A outcome, it’s probably 25 percent of our portfolio. Mr. HORNIK: So, we won’t – I mean, I’m with Marc. Mr. ANDREESSEN: Yeah, VCs… Mr. HORNIK: That’s not our business. Mr. CONWAY: Typical… Mr. ANDREESSEN: Yeah, VCs don’t… Mr. HORNIK: But the reality is that I think entrepreneurs start companies – even the ones who don’t say, oh, this is a 25-million dollar business for me, a hundred million dollar business, whatever. At any given moment, at any point in time, they sort of recalibrate. Oh, OK, not necessarily what’s the market, right? You know, the market for Aardvark was massive, there isn’t any question, but ultimately, you know, what are the risks, what are the challenges, these types of things? And so, going through that process – and frankly the guys who built Aardvark said, you know, here’s an opportunity to build something big and interesting and get it launched and get it out there and they viewed that as valuable, and so in combination, they thought that those were, you know, the factors that made sense and – well, you know, at the end of the day, we do what the entrepreneurs want to do because we’re not – you know, I wasn’t the CEO of Aardvark. I was a buyer, but in the end, I’m happy for them to have found a, you know, an incredible place to build the company. Mr. ARRINGTON: OK. Mr. CONWAY: I’d like to go back to the Blippy, Quora, FourSquare. You look at those three deals and you say, our valuation is getting out of control. And I say, you know what? You have to look at each one of those individually. Blippy, based on hearsay, I think, did get into what might be called a bidding war, where there were a couple of firms and somebody decided to, you know, lay down the gauntlet. Mr. ARRINGTON: That was the Elevation Partners is my understanding as well, is that they… Mr. HORNIK: In Blippy? Mr. ARRINGTON: In Blippy, yeah. Mr. HORNIK: I wouldn’t know anything about it. Mr. ARRINGTON: Yeah. Mr. CONWAY: I thought they were going after big stuff. Mr. ARRINGTON: I may be wrong. Mr. CONWAY: So, at Quora, I really don’t know what the story was but… Mr. ARRINGTON: Oh, I’m sorry, it was Quora who was with Elevation Partners. I got that wrong. Yeah. Who – I’m sorry, you told me before – but Blippy? Who was it that you were bidding again? Mr. HORNIK: It’s always amazing to me that you – this obviously works sometimes. Mr. ARRINGTON: I apologize for anything – I’m sorry. Yeah. Mr. CONWAY: The interesting dynamic is one where I know a little bit more and I admire what’s going on is FourSquare, where I believe – unless I’m being mislead and I don’t think I’m being mislead. In the case of FourSquare, I believe that it’s a very mature entrepreneur who does not want to conduct an auction… Mr. ARRINGTON: Yeah. Mr. CONWAY: For dollars. He is conducting an auction for value add services to his company, which I think is pretty awesome… Mr. HORNIK: But I would say that they’re not typical. I’m sure that’s true, except for the fact that the price has already started at a very high price. And so, what – here’s what I think has changed… Mr. CONWAY: But the price could be double. I’ll bet you FourSquare, if he held an auction, would be double the price he will end up with. Mr. ARRINGTON: A hundred and sixty million dollars. Mr. HORNIK: I think that's – I think that’s extraordinarily unlikely. I think that chances that… Mr. ARRINGTON: Are you saying 160 for FourSquare? Mr. ANDREESSEN: I can’t… Mr. CONWAY: Is there an investor out there that would? Mr. ARRINGTON: Later on. Later on. Mr. CONWAY: I bet you I could find three. Mr. HORNIK: Really? Mr. CONWAY: I’m dead serious. Mr. HORNIK: So, this is what’s interesting to me about what’s going on right now. Mr. CONWAY: And they’d be private equity firms. Mr. HORNIK: So, I actually don’t think that’s true at all, but let’s assume it is. What’s interesting to me is that… Mr. ARRINGTON: Did you just call Ron a liar? Mr. HORNIK: No, I said I didn’t think it was – yes, I did. No, you can disagree. But the bigger point is that there are great firms out there with good reputations, all of whom… all of the firms rumored to be interested in investing in FourSquare, and frankly, there were many more that were interested in investing in FourSquare, are great firms. Right? So, the idea – you know, we’re looking for value.. well, everybody talking to him right now could provide real value and these are firms that have great reputations, and they have money, they have a future. So, I understood when it was a time when there were firms that were needed to make their reputation or they had challenges or whatever that were all.. I'll bid up because all I have is to compete with is price. But what happens now is that there are so many top tier firms that are excited about these companies that it’s price and value. It’s not just value. Mr. CONWAY: No, the value that each firm offers is night and day different. How many of the firms understand the location based service market? Are they passionate about it? Can they go help FourSquare in their relationship… Mr. HORNIK: I – believe me, I believe in value added investing as I'm sure Marc does… Mr. CONWAY: This is the kind of stuff that I think Dennis is looking for at FourSquare… he's going – OK, money is money. I want to have somebody who can mentor me and add true value and grow my business. I’m just pointing out that that’s a really mature attitude, you know, that he’s not conducting an auction. Mr. HORNIK: I understand what you’re saying. I’m just saying that whether you’re conducting an auction, oh, gee, here’s the price, beat it or not. When the prices get to these lofty values, with a set of excellent investors, then, you know, call it what you want, ultimately this is – this is a supply and demand problem, right, which is, there is a very small supply… Mr. CONWAY: Yeah, Gowalla, Loopt, there’s all kinds of LBS companies out there. Mr. ARRINGTON: What I’m hearing here is that… Mr. ANDREESSEN: MyTown. Mr. ARRINGTON: Normally prices are getting high, but you also have only the best firms, you can even get into these deal. Mr. HORNIK: This is the interesting situation. Mr. ARRINGTON: Second tier firms. But you guys all happen to be first tier, so you don’t have to worry about that problem. Marc, you have to talk a little about… what excites you about FourSquare as a user? Mr. ANDREESSEN: Let’s talk about a different one. Mr. ARRINGTON: As a user? Mr. ANDREESSEN: As a user? I just – I think that the product makes total sense. I mean, I think it’s just … it’s the kind of thing that I'd describe as obvious in retrospect. Before Dennis did it, it wasn’t obvious to anybody, but now that he’s done it you look at it and, of course, like this makes just total sense. Mr. CONWAY: FourSquare in its space is Twitter three years ago. So, Twitter three years ago, you know, had just developed the API. Nobody was developing products around it. I think FourSquare could be the next Twitter of location based services. And I think that’s why people are so interested in it. Mr. ARRINGTON: And how about Quora? Mr. CONWAY: Rock star team with a rock star product. Mr. ARRINGTON: Did you look into… Mr. CONWAY: What’s wrong with that? Mr. ANDREESSEN: Quora – without commenting on the specifics – Adam and Charlie are two of the best guys from Facebook, outstanding pedigree, really, really talented guys, the product is outstanding. Mr. HORNIK: So, the other thing that’s interesting is we’re all on these services. You can actually see what people find exciting because we’re all on it. Right? In fact, you know, when the Gowalla financing was happening, we were all checking in – you could see – they were even checking in where they were visiting. So, you could see where Josh was pitching because he’d go, oh I'm at August Capital, right? And so, we’re on Quora, we see -we answer questions for each other, you know, oh, this is fun. You know, we’re on Blippy, I could tell you all the people who may or may not be interested in Blippy, by oh they’re tracking their transactions. You know, the thing that’s interesting about the consumer stuff is that we get to use it and the people who are really engaged in the market love it. I mean, we don’t just invest… I bought the company. I love this so much, you know, I bought the razor company. So, it’s really interesting, I mean, and it creates this a very interesting dynamic where, you know, when you’re on a service that you’re excited about and you like what it is, you can see everybody else is excited as well. Mr. ANDREESSEN: And this why – this all true and this is also why we also like investing in the things that people never heard of because there are services that people don’t use themselves, so, there’s – any number of other things like that. Mr. ARRINGTON: What investments do you have coming up that you haven’t announced? Mr. HORNIK: Right, what are those? Mr. ANDREESSEN: Oh, for example, we are very, very interested and active right now in the enterprise software and a very large number of professional investors think enterprise is dead and, you know, we just think that is absolutely not the case. Mr. ARRINGTON: It certainly isn't as fun as FourSquare. Mr. ANDREESSEN: Well – so there are some incredibly high quality entrepreneurs, we just – it's not been announced – but we just backed an incredibly high quality entrepreneur. With a great track record… Mr. HORNIK: Someone who is awesome. Mr. CONWAY: Can we co-invest? Mr. ANDREESSEN: He’s building a fantastic – he’s building what’s going to be a great – he’s going into a huge market, you know, going up against incumbents, you know, all the incumbents in the space have been bought by the likes of Oracle and… he’s going up against, you know, incumbents that are not going to make the shift to the next generation nearly as aggressively as he is and there’s all kinds of market demand for this and numerous companies. But none of us are ever going to use the product – it's not that kind of product. Mr. HORNIK: Well, this is the thing – right, actually, one of my most interesting companies right now is this company Splunk, which is a search engine for your data center. Does anyone have any idea what Splunk is? No, but on the other hand, it’s pretty exciting. So, call me. Call me. Mr. ARRINGTON: IPO? Just say it. Ms. SARAH LACY (Off camera): Skype IPO Mr. ARRINGTON: Skype IPO. Ms. LACY: Jesus Christ. Mr. ARRINGTON: I thought you say Stopio – I'm like is that the name of the company. Mr. ANDREESSEN: Maybe it was Stop BO or something like that… Mr. ARRINGTON: When will we see the Skype IPO? Just give us that one… Mr. ANDREESSEN: No specifics but the company is in great shape… Mr. ARRINGTON: They could go any time. Mr. ANDREESSEN: The company could go basically any time they want to. Mr. ARRINGTON: They've got the technology worked out now. Mr. ANDREESSEN: The whole litigation is long settled, they've got the band back together and the company is growing very fast, from the numbers I've read. I mean, Skype was a great idea on the day it was founded, Skype is a great idea when they first raised money. Mr. ARRINGTON: They had a lot of trouble raising money… Mr. ANDREESSEN: I know they did. Mr. HORNIK: Wekk it was that same kind of like litigation and it was like – hey, I'll meet you on the corner and such and such, I mean… Mr. ANDREESSEN: There were some – and it was in Europe and the engineers were in Estonia and it wasn’t completely, you know, it wasn’t like you could go visit it in downtown Palo Alto. But it was a great idea every step of the way, they executed marvelously every step of the way and the thing, it’s a classic network effects business and it just keeps growing. Mr. ARRINGTON: So, from a point of view – this is our last question – on a scale of one to 10, where one is we’re in a terrible industry right now, every VC we know is going to go out of business, and 10 is we have more money that we can count and we’re all going to make a billion dollars this year, where do you think the VC industry is right now? Is it a six, seven? Is it OK or are we – are things looking down because of the valuation? Mr. HORNIK: You can’t talk – I mean, the problem is you can’t talk about the VC industry right now as a whole… Mr. ARRINGTON: How healthy is the market right now? Mr. HORNIK: So, I think that we would all say that we are, you know, eight, nine, 10s about how our portfolios are doing, how the market for great entrepreneurs is, all of that stuff. So, to judge the market as a whole, I think that there’s all sorts of money that’s come into the venture market that, you know, will have a hard time finding its way back out. But on the other hand, I think that, you know, I feel good that I’m going to do well for my LPs and I would happily invest with these – I would happily be an LP in their funds. So, I think sitting around this table, you know, we’ll give it a – what do you think, a nine? I’ll give it a nine because, you know, I’m an enthusiastic positive kind of guy. Mr. ARRINGTON: You've only been doing this a… well, you've been investing forever, but you've only been a full-on VC for a year. You like it…? Mr. ANDREESSEN: Oh, yeah, I love it. It’s great. As a profession, it’s a great profession because you … basically you get to be educated by all the smartest entrepreneurs right now on all of the most interesting projects which is great. Mr. CONWAY: I agree with Marc, you get to talk to people who are telling you through their crystal ball what’s going to happen. Mr. ARRINGTON: And you haven’t gotten tired of this? I mean, you’ve been doing it… Mr. CONWAY: Hell no – 20 years. Mr. ARRINGTON: All right. Thanks, guys. Thanks very much. Mr. HORNIK: Thank you. Mr. ANDREESSEN: My pleasure.      
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| Copy/Paste Innovation: Groupon Gets Cloned In Russia And China Posted: 04 Apr 2010 03:53 PM PDT
Even a casual glance at new Russian site BigLion shows you that the creators not only copied Groupon’s business model, but they also just ripped the site design and navigation off completely, too. The sites look nearly identical, even down to the smallest details. What’s more, the practice seems to be accepted in Russia, and the new service has gotten some legitimate press that plays the cloning out as if it’s just a smart business decision (translation here). dp.ru says the service is “ideologically close” to Groupon (an alternative translation says it’s an “analogy.” and notes that Groupon raised $30 million in late 2009, “and thereby confirmed that the business model works.” Not a word about the ethical and legal issues around cloning the site and the business model. There’s a handy note at the end of the article for any other would-be Russian cloners out there. They note that CrunchBase posts news of “promising American startups” that have received investments. Perhaps a Russian or German clone of your startup is a simple badge of honor. But how anyone can hold their head up high when this is how they make a living is beyond me. There’s real tech innovation going on in Russia. Things like this just crush the entire community’s reputation. Update: Groupon CEO Andrew Mason points out Groupon.cn, another clone of Groupon. They go one step further than BigLion by just ripping off the name, too.
     
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| Fake Steve Jobs On The iPad, Conflicts Of Interest, And Apple’s Draconian PR Tactics Posted: 04 Apr 2010 03:38 PM PDT
Daniel Lyons, AKA Fake Steve Jobs, makes a living (or at least a hobby) of reporting and lampooning Apple news. Unfortunately, his controversial status meant that his employer, Newsweek, got pretty much left out of the iPad party. Lyons and Recovering Journalist blogger Mark Potts weigh in on Apple’s tactics and the politics of tech journalism in this interview on CNN’s Reliable Sources.      
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| The Art of the Introduction: Top Ten Tips Posted: 04 Apr 2010 02:02 PM PDT
I've been a VC for about 4 years now, and I do a lot different things in my job. But I'd have to say that making introductions, asking for them, and being introduced is something I do every single day. In fact, I looked through the 12,403 emails I sent in 2009, and 2,603 or over 20% contained the word "intro" or "introduce" or "introduction." Along the way I've noticed there are some best practices, so I've put together a Top Ten list here from what I've learned. Some qualifiers: First, this is for email introductions only, and focused on busy people who live and work in email. Second, it helps to have a personal reputation – it's not just the words or format in your email, but it's about who you are and the previous experience others have had with you. In the post below you'll see I've called the person asking for the introduction the Subject, the person you're trying to reach or making the introduction to is the Target, and the person making the introduction is the Connector. So let's get started with a practical guide to The Art of the Introduction to help you increase your effectiveness, reduce your inbox load, and have people look forward to responding to your introductions. 1. SUBJECT LINE MATTERS This one is a big one – DO NOT use just "Introduction" or "Intro" alone as email subject line. That's the equivalent of sending a resume titled "resume.doc" – it says nothing. You should have the names and company names of both people being introduced in the email subject line. 2. WHAT'S IN IT FOR THE TARGET? Ever hear the line about everyone's favorite radio station? WIFM – What's In it For Me. WHY should the Target care about this introduction? Put it in the first sentence or paragraph. Another way to look at it – is there any evidence in your email introduction that you know anything about the Target whatsoever? 3. CONTENT MATTERS Are you being specific enough about what you're asking the Target to do, and are you actually saying what your company does? If you're looking for a job or career help, did you attach your resume? If you're introducing your company, did you attach a deck or executive summary or at least a paragraph explaining what you do? Links are not enough – they're generally useless if the person reading it is on a Blackberry or on an airplane. 4. MAKE IT EASY TO REACH YOU Consider having your email signature (and your reply signature) contain all of your relevant contact information. You want to be one click away from a call or email. Every deck or executive summary should contain your contact information on the first and last slide. 5. MAKE IT EASY TO HELP YOU DON'T just verbally ask someone to make introduction – the follow through rates on those are usually low, and it puts too much work on the Connector. A best practice is to craft an email from the Subject to the Connector that contains EVERYTHING and can be easily forwarded to the Target (from the road a Blackberry, etc.) 6) CREATE FIREWALLS This one needs some explanation and some caveats – if the Connector is really close to both parties or has achieved a certain level of relationship with the Target, it can be fine to introduce both parties directly. But it often makes sense to consider the benefits of using a "Firewall" – the best/easiest example is via LinkedIn where it's easy and completely up to each party to forward or accept the Introduction. Another alternative to a direct introduction is for the Connector to forward information to the Target to see if they're interested first. 7. "LEAN FORWARD" ON YOUR RESPONSE When someone engages on a response you can really tell – it makes a difference and gets the ball rolling (e.g. offering some quick insight into the problem or opportunity at hand, offering multiple times/places to meet, etc) 8. CLOSE THE LOOP But don't create an endless loop – don't copy everyone on each of the 12 emails it takes to find an open time to talk. Instead… 9. EMBRACE THE BCC Blind Carbon Copy is the most powerful and least used feature in email. One simple BCC lets the Connector know that the introduction has been received and is under way. 10. EVERY INTRODUCTION CAN BE A WIN/WIN Help people out when you can and be honest and helpful even if you can't. I hope you find something useful here, and I'd love to hear about the best tips you've learned as you practice The Art of the Introduction.      
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| Help Key: Syncing and Sharing On the iPad Posted: 04 Apr 2010 12:34 PM PDT  I did a quick exploration of the syncing and sharing features for the iPad and found them slightly confusing but, ultimately, robust. Here are a few issues/findings I think you'll be interested in: No PDF support - You can drag ePub files over to your iPad and they will appear in the reader. However, you will need to convert all other formats. You can convert almost any format using Calibre, though, so fret not. iWork, Microsoft Office and email play well together - If you email yourself a Word doc, you can open it in Pages. This is excellent.
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| The App Store Now Has Over 3,000 iPad Apps, Only 20 Percent Are Free Posted: 04 Apr 2010 10:20 AM PDT
Currently, 80 percent of iPad apps in the store are paid apps, coming in at 2523 apps total. Only 599 of the apps are free, representing 20 percent of all apps. In terms of overall app numbers, games still rule; 942 of the 3,000 plus apps are games, with 804 of these apps being paid apps and 138 being free. Unsurprisingly, most of the 154 book apps available for the iPad are paid apps. Mobclix says the average price of apps is $4.99; and it will run you $12,572.78 to buy all the apps in the store. While iPad apps may not be easy on your wallet, Apple’s iPhone app store’s breakdown of free vs. paid apps are similar. As of mid-February, when the App Store included 150,000 plus iPhone apps, 75 percent were paid applications. Of course, the actual prices of paid apps should go down, if iPad apps follow the same trends as paid iPhone apps. And perhaps companies will ditch their pricey app strategy if users tend not to buy pricey paid apps. Time Magazine’s iPad app costs $4.99 per issue with the Wall Street Journal’s iPad subscription coming in at $17.29 per month.      
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EMG Technology, a company that 
Indian entertainment giant 
Digital advertising company 
When 
We’ve been digging deeper on the 
Just 
February 2009, and mid-way through the 
Andreessen says there are very few “main event” startups, pointing to a study that says Silicon Valley creates an average of fifteen startups a year that eventually get to $100 million/year in revenue. Those are the startups venture capitalists are aiming for, and valuation is secondary to just getting in the deal. Those deals tend to get bid way, way up.
It’s no secret that there weren’t many 
This post is by 
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