Interesting graphic from a write up by Blackstone on what is driving high p/e ratios for public technology companies

2010 was a challenging year for me personally and I took a fair amount of time off from blogging. I’m hoping to get back into the groove of writing this year.

Initially I thought I’d write a lengthy retrospective about my year, but who wants to dwell in the past? So I’m going do a quick catch-up for those who may think me AWOL and then get into some of what has me excited going forward. If you have specific questions feel free to ask in the comments, or email me, and  I will gladly answer.

2010 saw me transition out of Workstreamer, a company I started 4+ years ago. Workstreamer is going strong under new leadership. Ben and I sold the company during the late summer. It’s hard to let go of your baby.

Since leaving Workstreamer I started two projects. The first, Eat.ly, was started with three friends (now all  employed at Foursquare). Eat.ly was recently acquired by Foodspotting. The second project was one that truly excited me and I had hoped to work on going forward. The concept was most closely related to what BranchOut and Identified are up to: essentially bringing Linkedin to Facebook. Sadly, the project had to be abandoned for personal reasons. However, I am positive we were in a really ripe space that will see a breakout this year. People need jobs and Facebook is where the people are.

Over the summer and fall I consulted for two companies that I expect to make noise soon: Red Rover and Bundle.  Consulting was fun, but it was also difficult to not be the person making the really tough calls. I need ownership in projects I am involved in.

Most recently I’ve spent several months focused on researching trends and teaching myself some code.

Also, I am really excited to now be formally involved with my good friends at Rocketfuel, where I’ll be serving as an in-house entrepreneur of sorts, helping incubate an as of yet undetermined startup. Zvi will also be involved :)

So what has me excited for the year ahead?

First on a personal level I feel pretty happy; I have a ton to be thankful for and I have learned some difficult lessons over the past year that have left me stronger and hungrier than before.

I also am starting to get excited about startups again. At several points last year I questioned whether I wanted to stay in startups or move back into finance. Partially this was because I experienced some tough on-the-ground lessons. Partially it’s because I’m not as certain as I have been previously about where the big opportunities lie. Toward the end of 2009 I knew that Facebook, Location and Gamification were where it would be at.  Recently I have been less sure. For example something about Twitter still makes me think it isn’t as exciting as expected.  Other services like Quora and Foursquare have me really jazzed. Mobile is going bananas. I think ‘timing’ [example, example] will be a meme. Follow on rounds and talent shortages have me a bit worried and I think 2011 will be a challenging year for many for those two reasons. I’m excited that startups are going mainstream — kind of hard to explain what I mean specifically — but articles like this are the general idea.

So we’ll see what happens, but I’m ready to get building again.

Anyway, here’s to a fantastic 2011 and a resurgence in blogging.

It feels good to be back!

Sam

**links to come

I wanted to share a quick hack I’m using this weekend.

My sister is in the process of moving from New York to Baltimore to start business school. I suggested that we get some movers to help us on each side of the trip, figuring we’d pay $40 an hour and provide some food and plenty of water. I used Craigslist to post a basic advertisement about 48 hours beforehand.

In the past I have used Craigslist to find handymen for a number of jobs such as moving furniture and brush. The response rate has always been high, but filtering to find the best/most trustworthy of the bunch is always a challenge.

However, this morning it occurred to me to run Rapportive and see if I could find Facebook or Linkedin profiles of some of the applicants (Rapportive is an awesome app for Gmail that surfaces that shows the social profiles for various email addresses). Sure enough, we had a total of about 40 responses and about 10 showed up in Rapportive. After scanning their profiles to eliminate anyone who looked like a serial killer I picked a jazz musician in New York (listened to his stuff on MySpace) and a student in Baltimore.

Filtering against public social network profiles is definitely not the be all end all, but it’s definitely better than nothing and provides me with a little bit more comfort when hiring strangers.

Groupon.com now sports a lofty $1.5B valuation.

Techcrunch had a great analysis of Groupon last week, dissecting the site’s revenues, traffic and potential.

While there are several juicy nuggets in the post, what jumps out to me the most is:

“Groupon gets more of its traffic from Facebook than any other site, including Google”

Note that in the image above, Facebook referrals to Groupon blow everything else out of the water. Makes it difficult to be a naysayer about Facebook’s ability to drive commerce.

An obvious pattern that is emerging on the social web is the rise of the public social gesture.

For a bit of explanation, the social gesture is really “social sharing” in the context of a brand, business or person. It began with the comment, and then moved to the status update and the shared link. Public social gestures now encompass an increasingly wide range of thingys from the check-in (Foursquare), to the purchase (Blippy), to the Like (Facebook).

While the lowest common denominator of gesture has traditionally involved a hyperlink somewhere in the mix, Facebook has made a bold move to challenge this as I outlined the other day.

Paul Buchheit of Facebook had some really interesting insights into the rise of these gestures at today’s Web 2.0 Expo. I paraphrase below a few sentences worth pondering

Paul Buchheit: “[Facebook’s] real power is in the people. [Facebook is] an amazing product because it has all the users”

Sarah Milstein: How about privacy on Facebook?

PB: I changed my privacy settings to be more public. I like the idea to share things easily — except my phone number and email. This again goes back to FriendFeed. It’s about serendipity. but it’s hard to predict what those things will be. Things tend towards being better the more we share.

SM: So after Gmail and FriendFeed – what’s coming next on the web do you think?

PB: …quick and lightweight. That’s the future of a lot of what’s upcoming in the communication mediums. Making it easier to do lightweight conversations.

… It’s not too shallow. It creates the context for conversations later on.

A week ago I was in San Francisco for F8 and I’m glad I was.

Several months earlier I wrote about the impending “Facebook gold rush” and I believe it’s beginning to materialize. Facebook is a true force and I don’t think people realize the magnitude of what they have been accomplishing.

The move to create a universal Like button is fascinating because it highlights a key distinction between Facebook and Google strategies: the hyperlink vs. the Like. My guess is that when Facebook borrowed the Like concept from Friendfeed they never expected the volume of Liking that materialized. Likes are in many ways a lower friction form of link sharing. Thus as websites begin to implement Likes (50,000 have already), Facebook begins to challenge Google on many levels. The foundation of Google Search is page rank, and thus hyperlinks. By pushing web visitors away from sharing links in favor of clicking “Like”, Facebook begins to challenge Google in a way that may not be immediately obvious, but is most definitely ambitious and possibly game changing.

More:

• CopyBlogger on How Facebook is Killing SEO
• Wired on the Great Wall of Facebook

I’m at F8 and was pumped to hear the announcement for like buttons extending outside of Facebook and the Open Graph initiative. As Zuckerberg said, the “default is now social.”

One thing to note is that Facebook’s default like-button code won’t work on WordPress as it does not account for dynaimcally generated pages (e.g. a blog). However, I found a version that works.

Download the Like Button plugin here.

Update: if you are wondering about whether like buttons will replace the older “share buttons”, the answer is YES

In my thinking about how web technologies are evolving I think attempting to conceptualize or invent the next Facebook is nearly impossible. Massively disruptive startups “just are.” IMO it’s not possible to know what will be the next Twitter or Facebook because these types of platforms/applications are outgrowths of the current state of human interaction. Such technology arrives just at the right time to grow in tandem with new manners, social gesture and desires. I believe with we have moved past the brute force of functionality being the deciding factor of what we will use next. Instead, we find new technologies that suit a particular direction the world is shifting and that technology co-evolves with this shift.

So, my thought is to focus on what I think of as the “lowest common denominator”. What do all these platforms and applications have in common? Are there attributes so common, or so core to the platform, that any next-generation platform is also likely to use them?

In my mind, discovering and iterating on least common denominators create excellent positioning for startups. Such an approach would be largely platform agnostic, highly defensible and probably simple enough to grow rapidly and at tremendous scale.

Hmm.

As I pointed out in a tweet a week ago — the fact that Dave Morin left Facebook seemed a clear signal to me that Facebook would not IPO in 2010. It’s awesome that Dave is pursuing his dream, but also says something interesting when you read between the lines.

My Tweet:

News Story One Week Later:

My good friend Mike authored a great post tonight on “behavior generated content.” An all-star cast followed up with great comments (@lessin, @andyweissman, @jonsteinberg, @ericfriedman and others). It’s worth a read.

A comment Jon Steinberg made struck a chord with me:

“it’s more an overall issue of people sharing more and the line being further public than we ever thought we’d be comfortable with. Each successive push goes further: Twitter to Foursquare to Blippy”

Yes! A simple but powerful observation. The early-adopters are pushing the envelope with new services that ask us to publicly expose data in greater quantity and in greater quality (i.e. increasingly sensitive, or personal data).

Despite my love for trying all these new services, the truth is I am very hesitant to expose my own personal data in public* ways. As an example, I was absolutely against the idea of Foursquare (a service that reveals your location) until I began to understand something…

Why Am I Sharing Publicly?

In thinking about why I’ve chosen to make more of my personal data public, what’s become clear is that it’s all about the data — not about the social.

Union Square Ventures calls this “data exhaust“. Exposing information publicly inherently allows a data derivative to be created and this derivative can in turn be synthesized. My personal experience is that my data exhaust leads to ever increasing “net personal benefits.” I use new services that make me more efficient, save me money or help me find new opportunities.  So far the pros of my participation far outweigh the cons. It’s a tradeoff I am happy to make.

Back to the Foursquare example. Initially I began using Foursquare because it was hip among my friends and winning badges was fun. Now I only use Foursquare for its data byproducts: tips, specials and the record of everywhere I’ve been. Even my observations of Twitter usage mirror this trend: I see much less conversation than I used to.  It’s less about the social.

What excites me still about Foursquare is that the value of the company’s (and its API developers’) net personal benefit to me should continue to improve and increase. As a data asset, Foursquare is only in its infancy: the derivative value of knowing where I am and where I like to go is huge and the potential value that can be returned to me is definitely worth the tradeoff (IMO).

Will there be a New Moore’s Law?

Based on my own personal observations, I believe that the more data you expose publicly, the greater your proportion of net personal benefit(s) received. (Thus, as @lessin suggests, passive beats active in the long run).

Small examples: I join Linkedin and people are able to find me and offer me jobs. I join Mint.com and Mint is able to help me save money and manage my personal finances. I join Foursquare and I am learning about ‘specials’ and what to try at new venues. It’s early days, but those are all tangible benefits.

Why Mark Zuckerberg Is Likely Right

If my thesis — that the more data you are willing to share equates to the more net personal benefit received  — then Zuckerberg is right to bet on public. At the end of the day people are going to do whatever provides an improved lifestyle, as long as the tradeoffs are understood and the pros outweigh the cons. For someone like Facebook, being the system (or API) that surfaces the data other systems synthesize is a very powerful and lucrative position to be in. Forcing public makes sense in that context as a buisness decision.

Society is moving toward the start of a new inflection point on public data. In my immediate world, you’re increasingly in the minority by not having a public online presence.  As data synthesis systems continue to improve, I believe that the benefits one will get from exposing data publicly will increase dramatically.

Not only that, but often the value that can be extracted from data exhaust increases exponentially based on the quantity of the underlying data set. Thus, as more people opt for sharing more, the net personal benefits all receive will also go up: a recursive loop. A great example of this is Esther Dyson advocating that for scientists to better correlate genes and disease, millions of people need to voluntarily have their genomes analyzed.

Summary:

I’m all about incrementally improving my life and I am happy to make tradeoffs to do so, assuming the consequences and terms are clear. I would bet that most others would agree with me. My public sharing is about the derivative value I get, not the act of sharing in and of itself. As of now, the net personal benefits received from public sharing is not yet compelling enough for mainstream adoption. However, this will likely change over time.

*Note that I consider ‘public’ data to be a spectrum, from sharing bank account information with Venmo, to a public status update on Twitter.