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.
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.
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.
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.
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.
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.
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.
Forbes list of billionaires for 2004 has three Utahns again. But Jim Sorenson\’s fortune has increase dramatically since 2003.
My brother showed me his Belkin voice recorder attachment for his iPod today. It is tiny. He used it to record a one hour meeting today. I bought one at CompUSA for $49.95. One of my companies, LDSaudio.com, was approved recently as�iPod reseller. We told Apple that one of our marketing approaches to sell iPods would be to encourage�people use it for recording oral histories, which is an important part of family history preservation. I\’m going to start trying it out with my wife and kids to see how useful it is in capturing stories.
Linux is still the most famous open-source app, but database software using the same model is getting some play. MySQL is giving established software firms a run for their money. By Joanna Glasner. [Wired News]
MySQL (Seattle) raised $19 million in venture capital last year, has 4,000 customers (who pay to use the MySQL database and not contribute their code as open source) and made $10 million in revenue last year. Not bad for an open source company.