Thursday, February 26, 2009

Android / T-Mobile G1 First Impressions

After 2+ years as a more-or-less-satisfied BlackBerry user, I just made the switch to the G1, the first (and currently the only) production handset running Google's Android OS. As regular readers know I have high expectations for the Android platform, but felt like I needed to get closer to the OS and developer ecosystem to really understand what was going on.

Despite a terrible onboarding experience from T-Mobile (the title of a forum post I found on the subject: "Steve Jobs is laughing his ass off right now", pretty much nailed it), I'm otherwise delighted with the device / OS combination. A few quick thoughts in no particular order below:
  1. Moore's Law is Fully in Effect: Despite being in the software business I'm not a big gagdet guy, but each time I pick up a new device I'm reminded of the fact that the rate of technology change contines to accelerate. My BlackBerry 8700 was a nice piece of gear when I bought it, but both the hardware and software capabilities of the G1 (as with the iPhone) are astounding by comparison.

  2. Power Supplies are the Mobile Bottleneck: While device and connectivity leap ahead, mobile device batteries aren't keeping pace. My BlackBerry could run for 2-3 days on a single charge, but I'm lucky to get through a full day on the G1. The mobile promise will continue to be dragged down by battery life until a power supply breakthrough comes along.

  3. Apps are Fun But... : With over 500 million iPhone app downloads (and counting), smartphone users clearly love customizing their devices. Indeed, user-customized smartphones are now totems of indentity much like cars have always been. But (as this Pinch Media study suggests), the actual use of these apps is very low. Three related questions that come to mind are:
  • Q: What happens to the mobile app market and developer ecosystem if / when the novelty of customizing a new phone wears off?

  • Q: For how long will network conectivity and latency issues make mobile client apps (as opposed to purely browser-based ones) a viable path for software innovation?

  • Q: Will the anticipated "mobile platform wars" among Apple, Google, Palm, BlackBerry and Nokia extend the runway for the mobile app opportunity, or simply ensure the continued dominance of the current leader, Apple?
My gut tells me we're still in the first innings of the mobile applications opportunity - these new devices are just too fun and easy to customize for the demand curve to flatten out anytime soon. But as an investor with a strong preference for "picks-and-shovels" businesses vs. "hits-driven" ones, I'm still looking for a way to profitably surf that demand. If you've got suggestions, please send them my way...

[Update: One thing I took for granted with the G1 but - given my BlackBerry experience - I'm surprised I didn't highlight the fact that the Google onboarding experience with Android was flawless. All I had to do was enter my credentials once and my Gmail, Contacts and Calendar were all immediately loaded and ready to go on the phone. I spent countless hours fighting my BlackBerry to kludge together a solution to this problem and it was a total delight to have it all happen automagically.]

Monday, February 23, 2009

Google, Twitter and the Real-Time Web

I'm still a little mystified by the appeal of Twitter to the individual user, but I definitely see the argument that - taken in aggregate - the service offers a useful window into what a (rarefied) slice of the global population is thinking about right now. But when I read pieces like this one by Eric Schonfeld at TechCrunch, I can't help wondering why Google doesn't just turn on a more timely version of its Google Insights for Search service to steal a little of Twitter's thunder.

If the random musings of Twitter's 6-million odd users are interesting, then the most recent search queries posed by Google's order of magnitude larger user base should be, um, orders of magnitude more representative. Think of this as the first derivative of Google: a Google search engine that returns a normalized set of terms recently entered into the Google search box.

Am I nuts? Does this exist already?

Wednesday, February 11, 2009

Our Newest Potfolio Company: Frugal Mechanic

Last week Founders Co-op added a new company to our portfolio: Frugal Mechanic. This deal won't surprise anyone who's familiar with our investment thesis:
  • It's a niche offering (vertical search + price comparison in the $40B DIY auto parts market),
  • With a smart distribution insight (white label parts search for auto enthusiast sites, of which there are *many*),
  • Leveraging the Web as a database (via aggregation and normalization of large and messy public datasets),
  • And they get paid directly for the value they create (in the form of referral fees for converted purchases).
The two-person team includes veterans from some familiar local names (including Microsoft and Amazon), with a solid grounding in Web engineering, large scale data management and SEO. They've only been in business since mid-2008, but they've already built a nice direct revenue stream and have begun to sign on notable names as white label partners (including another local company in the automotive vertical, CarDomain).

Next up for the company: ramping up their white-label outreach and continuing to integrate new specialty parts data sets (e.g., performance tuning, accessories, international catalogs) to address an even larger share of the market. Unlike most consumer / retail segments, auto repair tends to be counter-cyclical, so we expect demand for the offering to stay strong through the downturn.

So welcome, Frugal Mechanic - we're excited to have you in the family.

Tuesday, February 3, 2009

Today's New York Times + Array Health Solutions

Last week I wrote about a small investment Founders Co-op had made in Array Health Solutions, a Seattle company that helps small employers control the spiraling cost of health benefits. This morning I unfolded my New York Times to find a front-page article on the very problem Array was created to solve. The story, titled "Small Payroll, Big Woes on Insurance", frames up the issue well:

"The economic downturn has only accelerated the pressure on small-business owners to pinch every penny, and many feel they have few options but to go after employee health coverage... [y]et for many small-business owners, it can be excruciating to reduce or eliminate benefits for employees who have long been treated as family and who continue to work at their sides, every day."

The story goes on to outline the solution Array makes possible:

"With the help of her insurance broker, Ms. Allen is exploring whether her employees could afford individual health policies if she provided them with stipends equal to about half of what she now pays for their health care."

The Array team still has to execute like mad for their offering to become the preferred solution to this problem, but I give them full credit for spotting the issue early and coming up with a creative solution that balances the economic needs of small businesses with the very real emotional and ethical commitments a business has toward its employees.