Saturday, March 26, 2011

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Friends Don’t Let Friends Get Into Finance

Posted: 26 Mar 2011 09:05 AM PDT

After having been a tech executive for many years, I needed to take a break, and I wanted to give back to society. Duke University engineering dean Kristina Johnson gave me a great spiel about how the school's Masters of Engineering Management program churns out great engineers, and how engineers solve the world's problems. She said that I could make a big impact by teaching engineering students about the real world and encouraging them to become entrepreneurs. I felt so excited that I joined the university without even asking for a proper salary. That was in 2005.

I was shocked—and upset—when the majority of my students became investment bankers or management consultants after they graduated.  Hardly any became engineers. Why would they, when they had huge student loans, and Goldman Sachs was offering them twice as much as engineering companies did?

So when the investment banks tanked in 2008, I cheered because engineering had become sexy again for engineering grads (read my BusinessWeek column).

But thanks to the hundred-billion-dollar taxpayer bailouts, investment banks recovered and went back to their old, greedy ways.  And they began offering even more money to engineering grads (and themselves).

Kauffman Foundation’s Paul Kedrosky and Dane Stangler have just published a report that analyses the damage this has done to our economy.

They note that the finance sector today produces a greater percentage of GDP than at any time in history. In the mid-nineteenth century, its contribution was between 1 percent and 2.5 percent of GDP. It peaked at around six percent of GDP at the beginning of the Great Depression, and then fell sharply. Since 1945 it has been steadily increasing, to 8.4 percent over the last two years.

Historians will tell you that empires collapse when they become too dependent on finance, but I'm not so pessimistic. I do, though, share the concern that Kedrosky and Stangler expressed in their paper:

Fewer people are being added to industry employment, but they are coming from new and narrower places. The financial services industry used to consider it a point of pride to hire hungry and eager young high school and college graduates, planning to train them on the job in sales, trading, research, and investment banking. While that practice continues, even if in smaller numbers, the difference now is that most of the industry's profits come from the creation, sales, and trading of complex products, like the collateralized debt obligations (CDOs) that played a central role in the recent financial crisis. These new products require significant financial engineering, often entailing the recruitment of master's- and doctoral-level new graduates of science, engineering, math, and physics programs. Their talents have made them well-suited to the design of these complex instruments, in return for which they often make starting salaries five times or more what their salaries would have been had they stayed in their own fields and pursued employment with more tangible societal benefits.

An analysis of MIT’s graduate-employment data shows that the financial sector increased its hiring from 18 percent of its graduates in 2003 to 25 percent in 2006. So not only are the investment banks siphoning off hundreds of billions of dollars from our economy with financial gimmicks like CDOs; they are using our best engineering graduates to help them do this. This is the talent that our country has invested so much resource in producing.

When most sectors of the economy grow, new companies are created. The authors found, however, that the finance sector is not driving firm formation; it is cannibalizing entrepreneurship in the U.S. economy by offering wage and skill premiums to individuals who might otherwise have started companies. It is also causing far greater volatility among publicly traded firms and a reduction in the quality of businesses started.

The report concludes that a shrinking finance sector will likely lead to a higher entrepreneurship rate and the creation of companies with greater social value, and still provide the financial intermediation services that are most important to young companies. So that's what we need in order to save this empire: to tame this beast.

Paul Kedrosky says that the virus that infects scientists and engineers and causes them to go to Wall Street rather than create something of societal value is "economic Ebola". He wants to be an "economic virus hunter". Let's all help him. Let's save the world by keeping our engineers out of finance. We need them to, instead, develop new types of medical devices, renewable energy sources, ways for sustaining the environment and purifying water, and to start companies that help America keep its innovative edge.

Editor's note: Vivek Wadhwa is an entrepreneur turned academic. He is a Visiting Scholar at UC-Berkeley, Senior Research Associate at Harvard Law School, Director of Research at the Center for Entrepreneurship and Research Commercialization at Duke University, and Distinguished Visiting Scholar at The Halle Institute for Global Learning at Emory University. You can follow him on Twitter at @vwadhwa and find his research at www.wadhwa.com.

Five Things Facebook Should Fix Immediately

Posted: 26 Mar 2011 08:27 AM PDT

Let me start with two questions. Why is it that such a successful company as Facebook feels like it needs to change and reinvent its interface constantly? And why are we so complacent with these changes that, quite literally, disrupt our online social lives?

We have seen how social media is changing the world around us, yet we don’t have a say in its progress. Undeniably, Facebook is already part of all of our lives, even for non-users.

We shouldn’t take the site for granted. After all, it has over half a billion users. Alternatively, we should not allow it to take us—their users—for granted either. I remember back when I was heavily using Digg, they made so many changes, that it was all too hard to follow. At around version 4, I couldn’t use it anymore and therefore left the site.

Now don’t get me wrong, I’m in favor of new design and up-to-date features. But when one has such a large community of users, you need to makes changes carefully and not force your members to suffer your through your own growing pains. It’s true, we can all leave the site if we are upset with the changes. No one is forcing us to be members. But most of us don’t want to leave. We want to be part of this community. Facebook should acknowledge some of the problems that need to be resolved and show appreciation for the mass following they have built before it slips away.

I’d like to highlight 5 critical problems that Facebook needs to fix immediately:

Groups
One day I saw this update on my Facebook feed: “If one more person adds me to a group, I’m sending you to the unfriended land.” I easily related to this, can’t you? I don’t know what Facebook was thinking by letting anyone add you to a group, and start sending messages as a default setting. That’s like saying: Hello spam, come visit me more often. And yes, your Facebook friends are the biggest spammers in the world, they just might not know it.

By the time I wake up in the morning, my mailbox has at least two new group invites (I’m not sure we can even call them invites), and email discussions around this group, mostly from people that have no clue why this group owner added them. Couldn’t you handle this one better Facebook? Shouldn’t I get an email suggesting that I join this group in the first place? And thank god, my chatbox is closed most of the time because if I had to get all of those Group discussions inside chat, I’d go nuts. I’m a member of my high school’s group (something that is always nice to remember) but I know some people that left the group since the chat was too annoying for them and they didn’t want to deal with (nor understand) the odd settings. So rant number one: Make groups less spammy.

Photo Viewer

I wanted to leave this section open and let you all say whatever that comes to your mind.. but I feel like I must say it out loud: What the hell?!

How did this design replace the previous one? The user experience is so completely wrong here. The light box annoys the eye and basically it is just a bad visual that doesn’t fit the overall design of the site. A photo viewer is for viewing pictures, but the pictures are now displayed in a smaller format so you get a poorer experience than before. Why did you fix something that wasn’t broken, Facebook?

And before you tell me to click F5 and forget about it, I don’t want to and I shouldn’t have to either. I think it looks bad, and I’m sure I’m not the only one, and since photos are a huge part of the site, I also don’t think it’s a good idea to change it from good to worse. Usually, it goes the other way around.

Places
To have a world of possibilities is sometimes great and sometimes confusing. I love both Foursquare and Gowalla, and only lately have I started to use Facebook Places. But when it comes to choosing one service, Facebook is my last choice. Why? You can’t connect it to Twitter. Perhaps Facebook thinks all my friends are on Facebook, but even so, if I want them to know where I am, I’d like to extend this ability to make sure they’ll be able to see my statuses from other platforms as well. I still don’t get why Facebook is so closed. If people want privacy they can set their own personal choices. What if other people want to share more? I think Facebook should allow it. After all, it’s a “social” network, right?

Messaging
I can honestly say that I haven’t switched from the old messaging platform to the new one. But I’ve noticed people sending me up to 10 emails when they meant to send only one. Most people don’t know how to fix this so they always just apologize for sending too many messages, which results in even more messages. Overall, it looks like Facebook is trying to make everything behave like chat (i.e., new commenting system) when chat is not something everyone feels comfortable using all the time.

Tabs
Now, I don’t want to say Facebook is evil, but I don’t really understand how they could dismiss the customized tabs so easily after people worked so hard on them, and many companies were built specifically around this creation space. Yes, I know you can still see tabs, but not as prominently as before. Again, this was to me at least the part of Facebook that was fun and now has been marginalized. With the latest changes from FBML to Iframe, many users who could create customized tabs on their own have been left with obsolete skills. Seriously, if a company asked me if it’s worth it to create something from the Facebook API, I’d say it’s a risky situation since Facebook so easily changes things solely for their own benefit. Tabs are one great example of that. I would never expect them to change such a great feature. One that really gave users and brands the feeling of ownership but, alas they did…

Remember when it used to be so much fun to use Facebook? When you had games right in your face (not just news), when you could see your connections from Flickr, Youtube, and other sites, when it was just a more friendly place? I miss that.

Does Facebook not care anymore? Or does it just demonstrate our own apathy and powerlessness as users?

Social media is a wonderful, wonderful thing. Don’t forget you have a voice. Use it. You can start in comments below.

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Facebook
Orli Yakuel
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Google’s Robotic Recipe Search Favors SEO Over Good Food

Posted: 26 Mar 2011 06:30 AM PDT

Editor’s note: Guest writer Amanda Hesser is a cookbook author, co-founder of cooking community site Food52, and a food columnist for the New York Times.

The entity with the greatest influence on what Americans cook is not Costco or Trader Joe's. It's not the Food Network or The New York Times. It's Google. Every month about a billion of its searches are for recipes. The dishes that its search engine turns up, particularly those on the first page of results, have a huge impact on what Americans cook. Which is why, with a recent change in its recipe search, Google has, in effect, taken sides in the food war. Unfortunately, it’s taken the wrong one.

In late February, when Google announced that it was adding a new kind of search, specifically for recipes, it seemed like good news for a site devoted to cooking—at last Google was shining its searchlight on content we deeply care about. But then came the bad news: once you get your new recipe results, you can refine the results in just 3 ways: by ingredient, by cooking time and by calories. While Google was just trying to improve its algorithm, thereby making the path to recipes easier and more efficient, it inadvertently stepped into the middle of the battle between the quick-and-easy faction and the cooking-matters group.

Before these new changes, Google recipe results favored sites with lots of content and good S.E.O. – e.g. AllRecipes and Food. Now, recipe results favor these sites, but also those with lots of additional metadata, such as ratings, calories, cooking times, and photos. Google is using this data in an honest attempt to find better recipes.

The problem is that this new search effectively prevents the thousands of excellent cooking sites and blogs from ever seeing the light of day. More importantly, those smaller sites and blogs are where much of the best work in food is happening online. Google recipe search now fails to deliver their promise of producing the most relevant results—because in recipes, the most relevant result is the best recipe.

Instead, its search engine gives vast advantage to the largest recipe websites with the resources to input all this metadata, and particularly those who home in on "quick and easy" and low calorie dishes. In so doing, Google unwittingly—but damagingly—promotes a cooking culture focused on speed and diets.

Take, for instance, a recent search for "cassoulet." The top search result is a promising recipe from Epicurious, one of the larger and better sites. But if you refine by time, your choices are "less than 15 min," "less than 30 min," or "less than 60 min." There is no option for more than 60 minutes. In truth, a classic cassoulet takes at least 4 hours to make, if not several days (the Epicurious recipe takes 4 hours and 30 minutes); yet there in the results are recipes under each of these three time classes. One from Tablespoon goes so far as to claim to take just 1 minute. (It's made with kidney beans, canned mushrooms, and beef, so it's not long on authenticity.)

If you refine by calories, you can even find two cassoulets that are purportedly fewer than 100 calories per person: the Lamb Shank Cassoulet from Good To Know contains a full lamb shank and sausage link per serving, yet is supposed to weigh in at just 77 calories a serving. No such dish exists unless the serving size is a pinch.

For something more mundane like fried chicken, a refinement of "less than 15 min" takes you to a recipe on Food that claims the total prep and cooking time is six minutes, even though the recipe itself tells you to bake it for 1 hour. Even if you do find a recipe that accurately claims a fast cooking time, how will you know it's a good recipe? Refining recipe search by time doesn't result in better recipes rising to the top; rather, the new winners are recipes packaged for the American eating and cooking disorder.

Google’s new approach is misguided even if sites don’t try to game it. What does cooking time really mean, anyway? What happens when you must marinate a dish for 24 hours? Do you count that as prep time or cooking time? The tradition of prep times began creeping into our cooking culture about 30 years ago with the rise of quick-cooking columns. They've long acted more as a marketing tool than as helpful information. The proliferation of cooking times has not only put pressure on writers to fudge times, but has encouraged editors to stop running recipes that take longer than an hour. Lost in the rankings will be such slow-build classics as paella and layer cakes.

Google must surely know that recipes are anything but precise formulas: they're descriptive guides, and quality cannot be quantified in calories or time. The search engine's real opportunity lies in understanding the metrics that actually reflect great quality. A simple place to start is by tracking the number of comments relative to pageviews, the number of Facebook likes a recipe has garnered, or how often a recipe has been shared. A recipe with 74 comments is almost certainly better than one that takes 8 minutes to make. (And at some point, Google should create its own system for calculating calories.)

I'm glad Google put effort into improving its recipe search, but their solution feels robotic rather than thoughtful. If they don't change their current approach, I fear to contemplate the future of American cooking. As it stands, Google's recipe search gives undue advantage to the "quick & easy" recipe sites, encourages dishonesty, and sets up people to be dissuaded from cooking, as they will soon learn that recipes always end up taking more time than they expected. Alas, the search algorithm fundamentally misunderstands what recipe searchers are really looking for: great recipes.

Photo credit: Sarah Shatz.

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Amanda Hesser
Food52
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Review: The Nintendo 3DS, The Next Step In Portable Gaming Evolution

Posted: 26 Mar 2011 06:27 AM PDT


Nintendo has long defined the rules of childhood. In Nintendo’s world, logic and whimsy are intermixed and there is always a bigger boss and another castle. We learned from Nintendo that you can always turn your enemy’s weapons against them and that evolution is a fact. We learned that the best stories are played out in your head and even when you don’t have a lot of friends you at least always have Mario.

Nintendo also defined video gameplay. Their NES console, while seemingly underpowered, sat under millions of Christmas trees and at millions of birthday party tables for almost a decade. Their audience grew up, new members joined, and the SNES, Nintendo 64, GameCube, and Wii pushed the envelope ever so slightly with each generation. The Game Boy grew up too, morphing into the GBA, the DS, and now something else entirely.

The Nintendo 3DS isn’t hard to love. It’s a cute little handheld aimed at an interesting demographic. Because children under 7 shouldn’t use the 3D feature, it seems Nintendo has made this for tweens and, more important, early adopters in the 18-36 market.

Read more…



RIM Buys Developer Of HTML5 Mobile App Testing Platform TinyHippos

Posted: 26 Mar 2011 06:25 AM PDT

Research In Motion has made another acquisition-mobile development company TinyHippos. In an announcement on both RIM’s development blog and TinyHippos blog, the BlackBerry manufacturer said that it bought the Waterloo-based development team (RIM is also based in Waterloo) for their extensive experience in web and mobile widget/web development. Terms of the deal are not disclosed.

TinyHippos develops Ripple, a multi-platform mobile environment emulator that runs in a web browser and is custom-tailored to HTML5 mobile application testing (we’ve embedded a demo video below). It essentially allows developers to “look under the hood” of mobile applications to see how the apps are performing in a variety of mobile environments.

Ripple, which was launched in 2009, also offers the ability to test and debug HTML5 mobile apps and offers multiple device and screen resolution emulation in real-time without having to redeploy the mobile application or restart the emulator. Ripple is actually built as a Chrome extension, running as part of the Chrome browser.

RIM says it will use the technology to offer a mobile environment simulator to the developers building apps for the BlackBerry platform. Apparently, Ripple will continue to be offered for download to the public as well. And the TinyHippos team will be working to bring BlackBerry support to the Ripple product.

RIM also recently purchased professional contact manager Gist, and UI development team The Astonishing Tribe.

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Research In Motion
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First Look: With Disco, Google Also Joins The Group Messaging Dance (Care Of Slide)

Posted: 25 Mar 2011 09:08 PM PDT

As we just broke the news on, Google has a secret group messaging project that was built from within their confines: Disco. Slide, which Google bought last year, are the ones responsible for the app. And since word is that they’re allowed to run autonomously within the company as their own startup of sorts, the app probably doesn’t have anything to do with Google’s broader social strategy.

Still, it’s a group messaging app that Google owns. So how is it?

Well, it’s very barebones right now. We’ve been playing around the app every since we stumbled upon it, and it’s pretty safe to say at this point that it’s not yet a GroupMe/Fast Society/Kik/Beluga/textPlus-killer. But it is also still in beta, and the iPhone app design implies that it will expand beyond its current shell which is little more than a way to organize group text messages.

In fact, better than the app is the Disco website, which provides a simple, streamlined way to send text messages to your groups from the web. And new messages appear in real time. You can also manage your groups from here, create new groups, and edit your profile. The site also works beautifully with the Google Voice Chrome extension if you have it installed.

As I said, the iPhone app is more of an initialization/organizational one. In fact, when you message someone, it simply loads up an iPhone-style SMS window which doesn’t show you previous messages sent in the group. This means your phone’s built-in SMS app is better to use for context.

Maybe that’s the idea — it’s definitely simple, which is nice. And the app looks good (which is not something you can say for all Google products). But I suspect updates to the app may allow you to see threads and perhaps even use Push Notifications instead of straight-up SMS (similar to the way GroupMe recently switched things up a bit).

Also funny: where’s the Android version? This is Google after all. But that should show you just how autonomous Slide is — they built an iPhone app within Google and completely neglected Android (I wouldn’t be surprised if one is coming though). It also speaks well to the notion that Google is looking for mobile developers to build hot apps from within the company.

Regardless of how it came about, Google now owns a player in the red-hot group messaging space — and it was actually built within the company! This means they don’t have to rush out to try and acquire someone to match Facebook’s acquisition of Beluga.

The next question is how this will tie-in with Google Voice, if at all.

You can find Disco in the App Store here.

Meet ‘Disco’, The Group Texting App Built Secretly Inside Google

Posted: 25 Mar 2011 08:39 PM PDT

It seems like Google has made a foray into the group messaging space today with Disco, a new iPhone app and website. Well, they sort of have.

The service utilizes the Disco.com domain that Google bought at Domainfest last year for $255K. The Disco.com site went up today and the beta app hit the App Store yesterday, but no one noticed it — until now. And here’s the thing: it was made by Slide.

We’ve been testing the app here at TC HQ and thus far its pretty fast, perhaps because it’s initial build is more bare-bones than fellow group messaging contenders like Fast Society, Beluga and GroupMe. It’s actually pretty similar to the initial build of GroupMe before it added push notifications.

Again, the app is made by Slide, the storied social apps property which Google acquired in August for $182 million. Slide has made iPhone apps before, but the last one was Super Poke, an app created pre-Google acquisition. But Slide is being run as an autonomous business unit within Google, so this app is unrelated to any Google “Plus One” social projects, we hear.

We’ve reached out to Google for comment on the app and will update when we hear back.

How the app will fare competing in the already saturated group messaging space remains to be seen, and you read MG’s take on it here.

In the meantime here’s two fun facts: that’s Slide founder Max Levchin’s Facebook photo in the app screenshot (he’s the one on the bike) and the sample group on the Disco homepage is named GaGa Fan Club, interesting light of Lady Gaga’s recent Google visit.

h/t TheDomains

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Google
Slide
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Dwolla’s FiSync Lets You Instantly Access Cash, Eliminates ACH Wait Times For Banks

Posted: 25 Mar 2011 07:21 PM PDT


Innovative web and mobile payments platform Dwolla is announcing today its FiSync integration for financial institutions, a technology which lets users of participating banks integrate their accounts with with the Dwolla platform. FiSync will let members of partner financial institutions send and receive money via phone, web, Twitter and Facebook as well as at actual stores instantly.

Because of a technology partnership with The Members Group, a full Dwolla FiSync core integration will eliminate the 2-3 day wait times associated with Automated Clearing House transactions and will allow users to directly transfer cash from their bank accounts, without the need for a pre-loaded Dwolla account.

Dwolla provides a free web based software platform which allows users to send, receive, and request funds from any other user, charging merchants and others receiving funds only 25 cents. The service just released a pretty amazing location-based check-in and pay service called Spots, which basically eliminates the need for NFC or hardware dongles like Square at locations with the integration.

Says CEO Ben Milne, “In ten years the market is going to be defined by our connections to social networks, not through email addresses and phone numbers. We’re creating technologies that allow you to spend money wherever you’d like to.”

Banks like Premier and several unnamed others have already signed up to use the service through their home-banking functions, and Dwolla is offering its custom APIs for free in case others are others interested.

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Dwolla
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OS X Lion Already Nearing “Golden Master” — Release Around WWDC?

Posted: 25 Mar 2011 06:30 PM PDT

It has been one month since Apple unveiled a developer preview of their latest operating system, OS X Lion. And while the initial deployment was a bit rocky, Apple appears to have worked through their initial Mac App Store distribution issues. And now another update looms — and it’s potentially a big one.

Specifically, Apple is gearing up to deploy an OS X Lion update to developers that they may be classifying as the “GM1″ release, we’ve heard. “GM” or “Golden Master” is a title reserved for software that is complete. But from what we’ve heard, this is only the initial Golden Master candidate. In other words, don’t get too excited just yet.

Apple has been working through many OS X Lion bugs and performance issues as they move towards the stated Summer release date. Given that GM candidates are already nearing, they definitely appear to be on schedule.

With OS X Snow Leopard, Apple released the GM version to developers just a few weeks before the actual software launched to the public. Presumably, if there were no bugs in this first GM candidate for Lion, they could stick to a similar timetable. But there probably will be, so instead I’d guess that a June timeframe will be more likely.

That would still mean an early Summer release — and potentially one before Summer technically even begins. After all, early June would line up nicely with the June 5 to 9 timeframe that Apple’s WWDC event is likely to take place this year. We’ll see — but work is clearly progressing quickly.

[photo: flickr/cheetah100]

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Apple
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Color’s Totally Public Photo Swapping Service Has A Public Office To Match

Posted: 25 Mar 2011 04:34 PM PDT


Stroll through downtown Palo Alto right now, and there’s a chance you’ll pass by one of the most buzzed-about startups in the Valley: Color, the new photo-swapping service that raised $41 million pre-launch and has been met with waves of hype and backlash. Color’s office is pretty nondescript from the outside — that is, until you notice the handwritten note that’s hanging on the door.

Color CEO Bill Nguyen, who sold Lala to Apple in 2009 before starting Color, has written a letter to passersby inviting them to come inside and check out the office — where they’ll actually be able to submit ideas for the product.

Here’s the full text:

“What is Color? We are an open social network for your iPhone and Android.

This is our home that we’ll be opening to our community. You can come in during the day and participate in our product vision. We’ll take your ideas and build them into our efforts. Whether you are a high school student, Stanford Phd candidate, or just an interested Palo Alto neighbor we can’t wait to meet you.

Regards,
Bill, CEO, Color

We’ve confirmed that the letter was indeed written by Nguyen, and he isn’t just paying lipservice to the neighbors — Color has every intention of opening parts of its office to the public.

John Kuch, who is the company’s VP of marketing and communication, explains that Color has set aside a room of its office where it will hold meetings, public events with guest speakers, informal chats, and other activities that are focused on explaining and improving the product. There will also be conversations around what Color’s vision of ‘public’ really means. I suspect this is a preemptive measure they’re taking against the inevitable waves of privacy concerns we’ll see if the service takes off.

The room itself is quite large and looks like a dining hall, complete with long wooden tables. And there are windows around the exterior so that people can see inside (again, fitting with the public theme).

As for the handwritten note — it really just fits in line with Nguyen’s irreverent personality.

Thanks to Stuart Hamilton for the tip.

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Color
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The Color Of Envy And Rooting Against Goliath

Posted: 25 Mar 2011 02:27 PM PDT

We’re now two days into to the life of Color, and it’s still the tech story that everyone in the blogosphere wants to talk about. Yesterday, I detailed why so much of that talk is directly related to the massive funding they were able to secure, rather than the product itself. And I wondered why so many people seemed to be rooting for it to fail spectacularly rather than succeed? The answer, it seems, may be quite simple.

There were some great discussions in the comment section (can you believe I’m saying that?) of yesterday’s post and a number of people reached out to weigh in as well. Of those, the most interesting perspectives were from entrepreneurs. A common refrain among them points to a simple reason for the Color backlash beyond the larger “bubble” talk: no one wants to root for Goliath.

“I think one reason for the animosity among startup founders is that the romantic model of the startup is the small group of founders in the grungy garage/apartment,” Michael Seibel, the CEO of Justin.tv and the just-launched Socialcam said. “To me and my founder friends it feels like Color is cheating the process and that is what we are reacting against,” he continued.

Ouch.

Another entrepreneur (who didn’t want to be named) used the current NCAA tournament as an analogy. “It’s like rooting for Duke versus rooting for George Mason,” they said. ”You can root for Duke, but it means you have no soul — no sense of the underdog shocking the world and doing something great against the odds.”

A better analogy may be in baseball. Many people get delight when the Yankees lose and openly root for that to happen. For some, this is because the franchise had so much success in the past and they feel like others should share that success. But in recent years, a big part of it is more analogous to the Color story. The Yankees have a payroll much higher than any other team in baseball. When they lose, people celebrate because it shows that money and the talent it buys aren’t unbeatable.

It’s a win against “cheating the process” as Seibel calls it. Of course, it isn’t really cheating in the illegal sense. The rules allow the Yankees to spend as much as they like on their team, just as investors are allowed to put as much money as they like into Color. But it is “cheating” in the sense that most teams, just like most startups, are simply incapable of getting access to these types of resources.

And that points to something else that a few entrepreneurs brought up: envy.

The use of that word will be interpreted as some of these entrepreneurs being cry-babies. But the reality is that a few of them simply wish they had the resources that Color was able to secure. “If we had that much money when we started…” type of thing.

Others felt the exact opposite way — feeling that $41 million and a $100 million + valuation pre-launch would be more of a burden than anything else. ”When building version one, being scrappy and without resources is actually a plus (this is why the YC is so appealing),” Seibel said.

But not all entrepreneurs are against Color. “I was at dinner last night at a Palo Alto restaurant with the Pulse team, and we were all using Color. I quickly realized what you had mentioned in your dinner table post: ‘The common misconception that my parents and others have about using the phone during dinner is that it's antisocial. But increasingly, it makes dinner even more social.’,” Alphonso Labs co-founder Akshay Kothari said, indicating how much fun he was having with the product.

He went on to say that the only problem he’s had with the hoopla surrounding Color so far is that the money and not the product has become the story. “Maybe I’m young and naive, but I always like the product to be the talking point. Funding gives you resources to build something beautiful. They have a lot of funding now — if they can execute on the product, nobody is going to talk about funding,” he said.

And he’s exactly right. At the end of the day, all of this initial backlash won’t mean a thing if Color can execute. In fact, we won’t even remember it.

But that’s still a pretty big “if”. As another entrepreneur tells me, “All my friends are now referring to Color as the Cuil/Joost of photos.”

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Color
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Internet’s Influence On Language Reinforced By OED Changes, Google In Cherokee

Posted: 25 Mar 2011 02:02 PM PDT

“Technology has been one of the biggest drivers of new vocabulary for centuries” — Jesse Sheidlower, editor at large for the O.E.D.

The Internet’s importance as a preserver and driver of language use has been reinforced this week with two key symbolic developments.

The first is the news that the Internet-isms OMG, LOL and the usage of “heart” as a verb have made the Oxford English Dictionary, throwing purists into a tizzy, because basically people generally hate change (it took about fifteen years for people to finally accept that the doubled-up adjectival noun “web site” would inevitably become the all inclusive noun “website.” And it took the AP Stylebook about twenty to eventually join the two).

The second development is that you can now search Google in Cherokee; In an effort preserve the endangered language Google has partnered up with the 300,000 strong Cherokee Nation, adding the traditional language to its repertoire of 146 interface languages here.

Cherokee Chief Chad Smith explained the reason for the move poignantly, “We have been working hard to get our young people interested in learning our Native tongue but we cannot be successful unless they can read and write in the medium of their era – all the digital devices that are currently so popular."

What’s notable about this is again the symbolism and the fact that the Internet has indeed become the linguistic medium of our era. If there’s a language that you can’t Google in, does it cease to exist? 

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Gary Vaynerchuk, Thank You For Ignoring My Calls

Posted: 25 Mar 2011 01:41 PM PDT

Gary Vaynerchuk is a busy guy. I don’t expect him to pick up the phone every time I call. After all, he’s on a book tour or something, and busy tweeting, and drinking wine. But then I saw the picture above. Yup, that’s Gary V on his cell phone in front of a poster advertising his new book, The Thank You Economy. The poster lists a phone number, (646) 401-0368, and asks prospective readers to:

Call now and the author Gary Vaynerchuk will answer this or any other question about The Thank You Economy.*

*Unless he’s in a plane or meeting

I thought I’d prank call him and ask him some questions about the book, like, “What the hell is the Thank You Economy?” His last book, Crush It!, needed no such explanation. The title says it all, and it’s fun to say (Crush It!”). The Thank You Economy sounds too polite and vague. I have no idea what it means. I guess I should read the book. But the poster promised me that Gary would answer these questions himself. All I can say is: False Advertising!* (*Unless he was in a meeting or something).

The outdoor advertising is kind of clever, though. Vaynerchuk bought the ads through ADstruc, which let him target them on 20 pay telephone kiosks in Manhattan around Grand Central, Union Square, the East Village, and near his publisher, Harper Collins. The whole thing cost only about $20,000. There’s even one near my subway stop. It’s as though he was daring me to call.

So I did. Several times. And, like a teenage girl, I was even a little bit excited. But then he didn’t answer. It went to voicemail. From what I hear, he’s only answered about 50 calls so far. Maybe you’ll have better luck. Go ahead, give him a call at (646) 401-0368. If he answers, he can explain what the book is all about. I tried.

Update: Gary was in a meeting, he finally called me back and he’s been answering a lot of calls since this post. He was a very good sport about the whole thing. Here is his video response.

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Groupon’s “Real” U.S. Revenue Numbers For February

Posted: 25 Mar 2011 10:52 AM PDT

Two days ago, I published the chart below with monthly estimates of Groupon’s U.S. revenues. The chart shows a startling 30 percent falloff in February from the month before. As I noted in the post:

Again, these are just estimates based on the equivalent of scraping Groupon's site, and thus could be missing something.

Well, at least for February, it looks like those numbers are way off. The post obviously caused some ripple effects to the extent that Groupon had to start addressing the issue with potential hires. As a result, it knocked loose the real revenue numbers for February and January. Groupon wouldn’t comment on the revenue numbers when I asked them about it, but according to a source, Groupon is now privately countering the numbers in my post: instead of $62 million in U.S. revenues, the company did $103 million in February. And that is up from $92 million in January (compared to the $89 million in the original data below).

I did some checking around, and I’ve been able to confirm that these two numbers (the $103 million and the $92 million) are right. I was also able to confirm that the 60/40 mix between U.S. and international revenues is about right.

But getting back to the cause of the drop. My original source on the data cautioned that there is a lag time between when the data is published and collected, and it is “definitely possible” that could account for the drop in February. Note that both January numbers are pretty close. The real discrepancy is with February. Also, if Groupon changed the way it published the pages in February, that too could have changed the numbers.

Other external guesstimates such as Yipit’s also point to a drop, but again, the more I learn about how this data is collected, the clearer it is that these are all imperfect methods. Groupon, of course, brings this speculation upon itself by being so tightlipped about its financials. That will change only if and when it files for an IPO.

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NYT Updates Its iPhone App With Push Alerts For Breaking News, New Subscription Plan

Posted: 25 Mar 2011 10:43 AM PDT

The New York Times, struggling to find its place digitally, has just released an iPhone update today, three days before its paywall plan is put into action. Well what’s new?

In addition to an interface touch up and the option to swipe between stories, the app now has Recently Viewed items at the top of it’s Sections section, followed in order by Photos and Video, which were not at the top before. The update purportedly will add more videos and slideshows to the app, so the re-prioritization of these options makes sense (and also cents, as these two content types have proven to be the most addicting for readers). The NYT Blogs like Dealbook and Media Decoder have (finally) been relegated to their own section, at the bottom of the app.

Most importantly, in this age of Twitter, the app now has push notifications for breaking news (which users can enable in Settings) which means that you’ll actually be reminded to use the NYT app. Twitter share and Facebook share options are also available.

These notifications and reminders could be crucial to user engagement once the NYT paywall goes up on March 28, as only the Top News section of the app will remain free and users who want to enter other sections like Blogs or Video will have to become digital subscribers starting at $15 for every four weeks (print subscribers will have unlimited digital access).

And if you think you can get around the paywall by just not updating the NYT app you’re out of luck: Come Monday, users will have to download the updated app in order to access any content.

You can find the app in the App Store here.

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A Look At The Uptime Of 50 Popular APIs

Posted: 25 Mar 2011 10:35 AM PDT

APIs are like websites: they are available most of the time, but unfortunately not all the time.

Website and application performance monitoring startup WatchMouse monitored the uptime of 50 of the most popular APIs (as ranked by ProgrammableWeb) for a month to see which are the most reliable – and which ones are rather flaky.

WatchMouse, which also publishes API statuses in real time at API-Status.com, found that ten of them performed without a single hitch between February 16th to March 17th, including goo.gl, Quora, eBay, Google Maps and Basecamp.

A number of APIs, namely those from Digg, GeoNames, Gowalla, Posterous and Eventful performed rather poorly, but ailing Myspace takes the cake in terms of unreliability.

Needless to say, a lot of websites and applications rely on APIs for their own businesses, so uptime is important to avoid that nasty domino effect to kick in.

The methodology for testing the sites for this particular report includes one simple API call plus check for a valid result, which means that it’s not exactly an in-depth functional test of the full APIs, but could still be used to evaluate whether one should rely on certain APIs for business purposes. The full report is available here.

The API checks were performed every 5 minutes from the 56 WatchMouse monitoring stations worldwide. Errors are used to count towards the percentage of availability or uptime for each of the sites.

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LinkedIn Founder Reid Hoffman Personally Thanks First Million Members For Being Early Adopters

Posted: 25 Mar 2011 10:30 AM PDT

As you may have heard, professional social network LinkedIn passed 100 million members this past week. Amid an upcoming IPO, this was a pretty significant milestone for the social network. And today, LinkedIn co-founder and chairman Reid Hoffman has sent the first million members an email, personally thanking them for joining the network in its early days.

TechCrunch editor Erick Schonfeld received a note (he is member #261,186), which we’ve embedded in the post. The note reads: I want to personally thank you because you were one of LinkedIn’s first million members (member number [ ] in fact!*). In any technology adoption lifecycle, there are the early adopters, those who help lead the way. That was you.

For the few users who were one of the first 100,000 members, LinkedIn sent a similar note thanking them for being “innovators” (Federated Media founder John Battelle was member #74,282).

LinkedIn, which launched in 2003, says that it is now being used in over 200 countries, with more than half of its users originating from outside the U.S. To be exact, the U.S. has 44 million LinkedIn members, and there are 56 million members outside of the U.S.

While the note itself isn’t monumental news, a somewhat personalized congratulatory note from the founder and chairman of LinkedIn is a nice touch for the network’s users. UPDATE: Reid Hoffman (@quixotic) is now trending on Twitter in the U.S.

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LinkedIn
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TechCrunch Giveaway: Xbox Kinect Package #TechCrunch

Posted: 25 Mar 2011 10:27 AM PDT

For today’s giveaway, we are giving a Xbox Kinect package away to one lucky reader. This package comes with the Xbox 360, a Kinect, and a game. Microsoft broke records by selling 8 million Kinects in 60 days and the Kinect has become the world's fastest growing game console. Want it?

Just follow these steps to enter.

1) Become a fan of our TechCrunch Facebook Page:

2) Then do one of the following:

- Retweet this post (making sure to include the #TechCrunch hashtag)
- Or leave us a comment below

The contest starts now and ends tomorrow, March 26th at 7:30pm PST.

Please only tweet the message once or you will be disqualified. We will choose at random and contact the winner this weekend with more details. Anyone in the world is eligible, as long as you can receive delivered packages.

Good luck!
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