Do iPhone developers care about the iPad? Here's a data point...

I picked up an interesting factoid this week from AppStoreHQ - a Founder's Co-op portfolio company that offers iPhone app search, discovery and social recommendations. In addition to their consumer-facing site, the company also owns and operates iPhoneDevSDK, the leading independent community site for iPhone developers. iPhoneDevSDK has over 20,000 registered members, but also picks up a ton of iPhone developer search traffic thanks to a very active and content-rich member forum.

I was curious to see how strongly the iPad announcement would register in the inbound search terms to the site, so I pulled the Google Analytics keyword analysis for Wednesday (the day of the announcement) and there it was at the top of the list: 'iPad human interface guidelines' was the top term for the day. I polled the whole keyword set for phrases that included 'iPad' and found almost 100 more, accounting for a little over 1% of site traffic that day (see image for the top 10 terms by volume).

So for what it's worth, my take is that iPhone developers *are* excited about the iPad as a new vector for innovation, and are already getting busy figuring out how to take advantage of its capabilities.

VC is dead. Long live VC.

I had the opportunity last week to speak at a Seattle Tech Startups meetup. The topic of the meeting was: "Where's the Money in 2010?", and I put together some slides describing how Founders' Co-op is thinking about the early-stage landscape here in the Pacific Northwest.

John Cook, a friend and local tech journalist, was in attendance that night, and when I saw the headline of the article he posted the next day I knew I was in for it. The headline read, "Venture capital business faces 'terminal misalignment of goals'", and it was a more-or-less direct quote from my talk. Later that day Andy forwarded me a very short email from a mutual VC friend. It included a link to the article and the phrase, "Boy – y’all have some pretty extreme sound bites going around up in Seattle!"

For the record, I *do* believe the goals and incentives of large institutional venture capital firms - those with billions of dollars under management - are hopelessly at odds with those of early-stage web entrepreneurs. And I'm hardly alone in this view (the slide in question included supporting quotes from Bill Burnham and Mike Arrington, two much more widely-read and respected voices on early-stage tech investing than I'll ever be). But the VC landscape is not a monolith - although mega-funds like Kleiner and Sequoia are technically in the same business as Union Square, Foundry or True Ventures, their strategy, approach and fundamental economics are wildly different.

There are more threads here than I can unravel in a single blog post, but this topic is fundamental to what Andy and I are up to at Founders' Co-op, so it won't be the last time I write about it. As briefly as possible, the thesis we're working with looks something like this:

• Thanks to open source tools and cloud-based services, the capital required to start a web software company has plummeted (and continues to fall).
  
• At the same time - thanks to Web 1.0 fund returns and the "Swensenification" of institutional asset allocation, the capital allocated to large VC funds has grown dramatically.
• While the latter trend appears to be reversing itself somewhat, VC funds are long-lived animals, and it will take years for that capital oversupply to work itself out.
• Because even large funds are run by relatively small teams, they *have* to put big chunks of capital to work (e.g., $10-$20MM per company) to correctly balance the allocation of partner time to committed capital.

The conditions above have left a huge hole in the funding marketplace for early stage web software companies. Smaller existing funds and a host of new funds have popped up to fill this gap - including the firms I mentioned above and many other besides. There isn't (yet) a clean categorization for these new investment pools - we're all still lumped together with the big firms as "Venture Capital" - but there is a significant difference in focus and intent, and I think the category merits its own label. Any suggestions?

Case Study: Twitter as a platform for building social recommendations

Twitter is a mind-blowingly huge platform for sharing personal opinion. John Borthwick recently shared some stats about the Twitter ecosystem that give a rough sense for the sheer velocity:

• Twitter: Jan 11th was the highest usage day ever (source: @ev via techcrunch)
• Tweetdeck: did 4,143,687 updates on Jan 8, yep 4m. Or, 48 per second (source: Iain Dodsworth / tweetdeck internal data)
• bit.ly: last week was the largest week ever for clicks on bit.ly links. 564m were clicked on in total. On the Jan 6th there were a record of 98m decodes. 1100 clicks every second.

Because Twitter is (mostly) public, and most tweets can be accesssed by API, it's also an amazing platform for analyzing sentiment on a wide range of topics. 140 characters isn't much of a payload, but when you include analysis of included links, and bundle in public data about individual Twitter users (also available by API), a smart developer can construct an almost limitless array of lenses into the global zeitgeist.

One of our portfolio companies, AppStoreHQ, has been working this problem for a while now. The company is focused on iPhone app discovery - with 120,000 apps in the App Store, it's gotten hard for consumers to find what they're looking for, and even harder for iPhone developers to get the attention of potential customers. AppStoreHQ started by indexing leading blogs to surface the most-talked-about apps among the "official" voices in tech. Then they added a similar feature built on top of the Twitter API, offering a rolled-up view of the apps currently seeing the most tweet velocity.

Over the holidays I was talking with the AppStoreHQ team about the "holy grail" of app recommendations: providing personalized suggestions based on the apps you use and love the most. With the sole exception of the iTunes Genius feature, all of the existing offerings require software downloads, website registration, out-of-workflow "voting" actions and other sources of behavioral friction that severely retard adoption and scale. Our question was: how could you offer a scalable social recommendations service for iPhone apps with the least possible friction?

As often happens, we already had the answer, we just hadn't realized it. Our Twitter Hottest feature is built by rolling up and analyzing individual tweets about iPhone apps. Why couldn't we "flatten out" that data set and instead look for similarities between individual apps and people? We ran a few quick database queries and found more than 10,000 people who had tweeted about an individual iPhone app at least once, and more than 100,000 app-related tweets. When we combined that with our own dataset from thousands of AppStoreHQ members sharing, bookmarking and buying apps, we realized we had amassed the largest social dataset about iPhone apps outside iTunes itself.

It took some serious heads-down effort to make it so (Ian has a great post up on the technical and scaling challenges of building social recommendations in Ruby), but this week we shipped our first rev of a social recommendations service for iPhone apps with the simplest and lowest-friction user model we could come up with: just tweet about the apps you love and we'll automagically build out a set of recommendations for you. The more you tweet about apps, the more accurate these recommendations become. And you don't even have to register at AppStoreHQ to get your recommendations - just visit the page we create for you based on your Twitter handle (e.g., http://www.appstorehq.com/users/yourtwitterhandle ).

You can learn more about this new service on the AppStoreHQ blog (and in today's TechCrunch writeup). I'm excited about the service itself, but the project also opened my eyes to the broader possibilities available by applying the same pattern in other domains. It wouldn't be hard to build a Twitter-based social recommendations service for almost any category of media - websites, books, movies, etc. - as long as you have a set of "canonical" URLs to map against the links included in the Twitterstream.

Are there other examples of services like this out there already? Let me know - I'd love to hear about them.

Paid iPhone App Reviews - The Plot Thickens

Yesterday I shared an email exchange with someone claiming to be Jon Atherton, creator of Wobble iBoobs. Today I received the following comment on that post:

see techcrunch - this is my response to their article.

I'm afraid you have been duped by an impersonator Jack.

1. Did you call the number mentioned above? If you did - did you leave a message on the voicemail. (it's a skype-in number based in Australia)
2. Did you do a search for Wobble iPhone App on google and find that the actual blog is: http://chillifresh.com/ and the about page lists my real email address: http://chillifresh.com/about-2/ (the blog address mentioned above is also one of our domains, and the about page lists my real email address)
3. Did you DM me on twitter?
4. Did you look at your own articles you have written about Wobble in the past - and ask the author of those articles if they had my contact details - including my skype contact for IM?

Answers - NO to all of the above... I'd appreciate you checking up a little more thoroughly in the future and perhaps updating the article above. I haven't paid for any blog posts nor offered payment for any blog posts... the person you have corresponded with is not me.

I am not sure what the motives of the person that has contacted you are, it would seem that they are trying to discredit me... I have been contacted by a another blogger a month or two back - on that occasion the fake JA had made several threats. I set the record straight before the article was published in that instance.

Wobble has been a successful App and has been downloaded around 1m times, the paid version has made over $300,000. I have published our stats.

I donate to charities and will consider making a donation to Haiti - however I prefer Médecins Sans Frontières:
http://www.msf.org.au/donate.html

I'm mystified as to why anyone would take such a roundabout path to discrediting the real Jon Atherton, but (if this is true, which it appears to be), I'm very sorry for playing into his hands.

Truth is consistently weirder than fiction, and this is just another example...

Slides from Seattle Tech Startups Event Last Night

Guarav Oberoi and Chuck Groom put on another great event last night for their Seattle Tech Startups members. I was one of three speakers - DFJ's Bill Bryant and CEOSherpa's Michael Schutzler were the others - and had a bunch of great conversations both during the event and in the post-event party at Big Time Brewing.

A big thank-you to Guarav and Chuck, not just the event, but also for having sparked and nurtured the growth of the STS community - their maillist is one of the most effective resources available to Seattle entrepreneurs, and the live meetups are a great way to experience the vibrancy of this community.

As promised, here are my slides from the meetup - they weren't designed as a leave-behind so they may be a little cryptic to anyone who wasn't in attendance, but at least they give the flavor...

Founders' Co-op - Seattle Tech Startups 2010

View more presentations from guestc1621b2b.

More on Sleaze: The Dirty Business of Paid iPhone App Reviews

I just got an email from Jon Atherton, creator of the popular iPhone game Wobble iBoobs. I was surprised to hear from him, because our last email exchange ended badly (full transcript below). When I reminded him about our previous exchange, I got the reply shown in the image at top.

Maybe sleaze pays in the short-term (according to Jon he's making $35K a month), but karma's a bitch...

Here's the transcript of my first interaction with Jon:

----------------
Hi there,
I'm Jon Atherton of Glentwood, creator Wobble.

I'm developing the new version of Wobble (Wobble 2). In order to promote my new version, I'd like to sell some more copies of the original Wobble and spread the word of our upcoming application.

I'm willing to pay 300$ (USD) if you'll write an article about Wobble where you'll mention about an upcoming version (Wobble 2). I'll be able to pay you right after the article is published and you sent me a link - please include your paypal email

Let me know what you think

Thanks in advance,

Jon Atherton.
----------------------
Hi Jon,

Thanks for the note. We don't do paid content, but you're welcome to advertise your app in our Sponsored Listings program - it will cost you less and probably do more for you...

You can learn more here: http://www.appstorehq.com/sponsored_results

Cheers,

Chris
-----------------------
JON: Chris - what about USD$500 ?
-----------------------
ME: Sorry, not something we do.
-----------------------
JON: Chris - i can offer up to USD$500
can be done quickly
let me know
-----------------------
ME: Here's a link to your developer profile: http://www.appstorehq.com/glentwoodptyltd-1093/developer

Once you've claimed your profile (I can help if you tell me what email address you used to register), you can buy top placement in our Entertainment search & browse results here for just $48 / month: http://www.appstorehq.com/sponsored_results
----------------------
JON: chris
what i want is a review - can be good can be bad i dont care exposure is what i need
usd$500 is fine
can you help ?
-----------------------
ME: No, sorry
-----------------------
JON: FUCK YOU ASSHOLE then
stupid prick you dont like money ?
-----------------------
ME: Umm, no - we love money, we just like to make it in ways that are transparent, ethical and fair

We also don't love to be shouted at, even by prospective customers.

Good luck with the business and thanks for getting in touch,
-----------------------
JON: loser


UPDATE1: Aviel sent me this link - apparently Jon's reputation precedes him. Note that the objections focus on him not *paying* for the reviews, not the tactic itself

UPDATE2: Check the comment thread for the post from "The Real Jon Atherton". I'm still confused as to why anyone would do this, but it appears that my email correspondent was *NOT* Jon Atherton but an impostor bearing a serious grudge (or a very twisted sense of humor)??!!

A Quick Rant on Sleazy Sales Tactics in Old Media

I just wasted 15 minutes of my day talking to Craig (Greg?) Malloy, who represented himself as an Associate Producer at Going Green Television. His appointment setter had called one of our portfolio companies - Cooler Planet - asking for me, claiming he wanted to talk about doing a feature on the company's work in alternative energy education. I took the call, answered a long list of questions about what Cooler Planet is up to, and asked a few questions about the audience and distribution for the program. So far, so good.

What came next made me want to throw up in my mouth. Craig launched into an explanation of the production costs for the show, as a lead up to his ask: that Cooler Planet be prepared to pick up the tab for "a small portion" of the costs, which he said would total $250,000 for a 5 minute segment.

Listen. If you want to sell me marketing services, sell me fucking marketing services. Don't waste my time telling me you're a media outlet looking for content, pitching me on your show and then pulling a bait-and-switch sales job built around outright lies about what it costs to produce your content.

I hate sleaze, I hate waste, and I especially hate people who prey on the hopes and fears of entrepreneurs who are busting their ass to build a real business.

OK, rant over. Thanks for listening.