Open Source Business Conference 2004

I just returned from an amazing conference in San Francisco where I gained a much greater appreciation of the accelerating shift away from closed-source proprietary software to open source software and web services that provide value-add on top of a free technology stack, sometimes called the LAMP stack: Linux, Apache, MySQL, and PhP. I was impressed by many things about the conference, including its business tone and convincing statistics about adoption rates of open source, but two talks stood out for me.

Jump Start Your Business Brain by Doug Hall

Doug Hall says you should focus on one "overt" benefit and not try to be all things to all people. The book states that "analysis of four thousand concepts indivdates that the greater the number of benefits promised, the lower your chances of success." People talk about writing marketing copy that emphasizes the benefits and not the features. But Hall goes one step farther: focus on a single, overt benefit. "The more you focus on doing one thing great, the greater your probability of success." He asks why people choose particular restaurants. Usually it\’s because they are famous for one dish or specialty. Great restaurants don\’t try to be all things to all people. In my case that\’s true. The main reason I ever want to go to Ruby River is for their giant coconut shrimp with orange marmelade sause.

Blue Nile files for IPO

Seattle-based Blue Nile, an e-commerce diamond seller, has filed for its IPO. The company had revenues of $129 million in 2003 and operating income of more than $11 million. Imagine that: another profitable e-commerce company, this one selling diamonds and jewelry, with an operating margin of more than 8%. The bubble burst because of over-investment, but the internet�works incredibly well for well conceived e-commerce, content, and advertising business models.

Terms Sheets & Valuations

I\’m reading (it\’s about time) a great 100 page book called \”Terms Sheets & Valuations: An Inside Look at the Intricacies of Term Sheets & Valuations\” by an east coast venture capitalist. It is outstanding. I wish I would have read this book five years ago before we (MyFamily.com) raised our first $12 million Series A round. I\’m not sure it would have changed the subsequent events, but at least I would have had my eyes open going into business with venture capitalists. I agree with this quote by Murray B.

Albertsons Suppliers Must Participate in RFID

Newsflash. Radio-frequency identification technology has yet another major backer. Albertsons Inc., the $36 billion food and drug retailer, said Friday that its top 100 suppliers must participate in its RFID program by April 2005. Source: Techweb

I\’m very interested in doing a startup in the RFID space. If all suppliers to major retailers have to use RFID technology within just a few years, there is a very large opportunity in this space. I\’m going to start looking around for startups in this space.

Marchex IPO

I\’m watching with interest the planned IPO of Marchex, Inc., a Seattle-based company started by the Russ Horowitz gang�– the founders of Go2Net. These guys are excellent business aggregators. They make acquisitions and weave them�into a large, scalable business. Marchex is seeking $28 million (revised downward from their November S-1). Last year\’s revenues were about $22 million. Most of it came from Ah-ha.com, a company that MyFamily.com once acquired and owned briefly.

Most LinkedIn Person in the World

I learned this week about Thomas Power, the man from the UK, who claims to be #1 in the world in business connections. He has more than 1600 connections in LinkedIn.com, an unbelievable number! I\’ve been using LinkedIn.com actively since November and have 151 connections. I\’m the most LinkedIn person in Utah. But Mr. Power (I\’d say he is well named!) has totally surpassed supreme online influencers like Joitchi Ito and Reid Hoffman, founder of LinkedIn.com. It turns out he is a full-time professional business networker. He runs ecademy.com, a business networking company with 26,000 members. Many of his online connections and endorsements come from people he\’s never met, but still, he seems to have earned this recognition. He must spend a lot of time forwarding referrals to and from members he has never met.

Blackboard Files S-1

It was great to learn today that Blackboard has filed its S-1 for an IPO. Blackboard is a dominant company in online software for higher education courses. They estimated that 12 million students and faculty used their system last year. Revenue hit $92.5 million, while losses were reduced dramatically from $51 million in 2002 to $11.5 million last year. The online education market is something that Infobase Ventures is very interested in.

Paid Inclusion

Huge news: According to CBS Marketwatch, Ask Jeeves has said that it will no longer guarantee inclusion for web sites that pay to be included in its search engine results. In my opinion, Google has proven that paid�inclusion is evil, or at least really stupid. Search engines should index all worthy sites and not just commercial ones that pay. I don\’t think Google will ever resort to paid inclusion.