Does the Iphone Suck?

I just waited 1 minute for my phone to connect to call my wife.  But hey I only had 3 bars and a 3G symbol.  Why should this phone work in downtown New York?  It’s not that big a market.

This afternoon I was standing next to a window in the betaworks office as John Borthwick tried to demo to me.  It only took him 2 minutes to bring it up.

Dropped calls, frozen screens, wtf?  I was a diehard Verizon Wireless person and I almost returned my Iphone because it was so bad out of the gate.

Look, the App Store is amazing the apps (including the aforementioned GoodRec, Google Earth, and countless others) are very cool.  Everybody knows it.  Even the free broadband service announced by AT&T today came as  a nice bonus.  The phone is spectacular in form and function.  I’m not adding anything new here.

But, I need my phone to work and I think Apple and AT&T are seriously screwing me.  Typically, I’m drinking Tequila by this point on Friday afternoon, and I’m going to hop on my bike, go home, down some Partida, and head out for some trick or treating.

I guarantee you my phone battery wont survive the evening.


Fred Wilson and Tim O’Reilly on Startup Opportunity

After a great bike ride into work that was joyously interrupted by Ry’s Halloween Parade at school, I stumble upon a Art Laffer’s op-ed piece in the WSJ courtesy of Brad Feld.   Another in a series of doomsday scenarios that just redefine the word “buzzcrusher.”

It’s a pretty well-argued piece, but during this month’s depressing news, some of our more important intellectuals have been offering up some hope.

First is Fred Wilson who, in my opinion, has really revived the idea of the citizen intellectual from his vantage point as a venture capitalist.  I’m new to the AVC community, but I really like the discourse that has emerged in Fred’s community and find it nourishing.  I don’t always agree with him and was motivated to start YallaGuy in part because I wanted a forum to challenge some of our leading venture and entrepreneur intellectuals.   Mostly I began because I admired AVC so much and am grateful that Fred has helped restored the importance of prose in our everyday life.

Tim O’Reilly wrote an eloquent endorsement of Barack Obama earlier this week.  His argument struck many of the same themes as other well-constructed centrist endorsements, but I was struck by a small passage in the middle of his essay.

…for those of you who are concerned about the financial downturn, that reinventing government will be a huge business opportunity. Yes, much of that business may well go to existing government contractors – navigating the maze of Washington procurement is not for the feint of heart – but there will be tremendous demand for expertise that today can only be found in the cutting edge technical community.

Even if the most brutal predictions of downturn occur, interesting, lucrative startup opportunities for reinventing government will emerge.  I grew up in Washington and I know  real disadvantages to having the government as a customer exist, but big companies tackle big problems.  Government is at the center of the energy, healthcare, and education challenges we face and companies that want to solve those challenges would do well to involve governments at the federal, state, and/or local level.

Fred has a post today about Donor’s Challenge but what really interested me was his broader points about the restructuring of philanthropy. Here’s an excerpt from Fred’s post.

We (our firm Union Square Ventures) did a “sessions event” last year called Hacking Philanthropy in which we discussed how to use the internet and marketplace models like Donors Choose and Kiva and others to radically reshape the world of doing good. Since then, I have been committed to doing everything I can do (within reason) to put the “rubber chicken circuit” out of business. What Obama has shown, and Dean before him, is that the Internet is the most powerfulfundraising tool ever invented and we have to harness it to do more and do better. Donor’s Choose is showing the way and I’ve been incredibly inspired by them.

Obama’s fundraising and organizing might be the single greatest application of the Internet to effect change that we have witnessed so far.  No company will affect the world more than our next President and without Obama’s Internet organization, I’m not sure he could have been successful.  Part of his appeal to many of us is how sophisticated he has been with his deployment of technology to raise money, organize volunteers, and articulate policy.

This example can very much pave the way for a new advocacy in the NGO world and philanthropy is a big component of the NGO industry.

We could be entering into the worst economy since the 30s or 70’s, but even then opportunities abound to help pull the world through this period.  The good news for the entrepreneurial faithful is that the pretenders who thought they could be entrepreneurs won’t try it in the next year or so.  Time to get a head start.

“Yalla,” say New York’s Israeli Startups

Last night 200 people attended our TechAviv New York meetup.  Awesome turnout and with even sicker demos.  In particular I wanted to highlight a company called Innovid which was seeded by Jeff Pulver and later backed by Genesis Partners.  They are still in stealth mode, but they have a product  that allows for in-video placement on the fly and could really revolutionize the video advertising marketplace.

We also heard from TechCrunch 50 presenter Tweegee that has a next-generation tween web destination that is just entering the US Market.  Very robust offering as they attempt to make all social media activities available for tweens in a safe environment.

I will be writing a follow-up post on some other observations later today or tomorrow.

Consumer Confidence Crushed

Thanks to Jermy at Lightspeed for assembling all the explanations.  Long story short consumer confidence ( a measurement about how people feel about the next six months) is the worst it has been ever.  Check it out here.

Confident as I am about the future I feel compelled to share the bad stuff too.

Tech Powerhouse Endorses Obama

An extraordinary endorsement from Tim O’Reilly who does not disclose his political affiliations but appears to be an independent.  Very much worth reading here.

When Obama Wins

Roger, I’ve been thinking about your doomsday post that you published yesterday.

This is the worst seven weeks in America since Sept 11 to October 31st 2001.   Seven years ago that period was marked by an emotional state of fear that was totally unfamiliar to us. Remember riding the subway or airplanes in the aftermath?  We were scared.   Our personal safety and sense of peace was inexorably shaken by one coordinated act of staggering terror.

These six weeks are a 9-11 of economic dislocation.  Many major media outlets and several political figures have used the world Depression, a period of 25-33% unemployment in America.  Confidence in Bernanke and Paulson eroded as both men failed to author a coherent strategy and suffered the embarrassment of misjudging congress. By the time they figured it out, trillions of dollars in wealth was destroyed (much of it outside of America) as we came to learn that our entire country is overextended. It really sucks.

Yet  this economic catastrophe destroyed McCain’s meager chances of pulling out a narrow victory.  Perhaps we will view this timing with gratitude in a decade.  2008 was already a Democratic year, but the economic meltdown has ensured that we are about to elect a very, very different person as our next President –a true progressive.

Let’s define progressive for the purposes of this post.  Here’s a paragraph from the New Democratic Network site.  It’s instructive:

… (for) progressives to succeed in the 21st century as they did in the 20th, they will have to do three things: offer a new governing agenda that speaks to the challenges of our day; master the new media and technology tools that are changing the way we all communicate and advocate; and understand and speak to the radically new demographic make-up of today’s America.

Progressives are not synonymous with liberals.  We systematically thinking about government problems in the context of new technologies, new demographics, and, I would add, the forces of globalization.

Barack Obama has extremely progressive politics and he is going to have a much larger mandate than Bill Clinton had when he took office.  Remember Ross Perot won nearly 20% of the vote in 1992.  This will be the biggest opportunity for progressive political change since the Johnson administration.   LBJ was among the most gifted politicians of the last 50 years.  If Obama can match his skills (no way he could match his experience) we are in for some big changes in America.

And these changes will be felt throughout the world.  For all the talk about how interconnected the global economic system has become, nobody that I have read is talking about what the impact of Barack Obama’s election will be on the world’s politics and policy.  We are about to elect the child of African man to be the President of the richest nation on Earth.  Americans will finally demonstrate to the world the true measure of our messy democracy and convincingly demonstrate that the  flavor of our multi-cultural republic is not some abrigded version of democracy in countries where minorities have no real hope of grabbing the leadership.    Do you really believe a peasant can become Premier in today’s China?   An “Untouchable” in today’s India?  Where are the minority political leaders of France, Germany, and the United Kingdom?  This isn’t simply symbolic.  When pundits discuss Obama’s opportunity to  “restore American stature”, there has to be a positive economic outcome from this reconstruction.

Look, I would be lying if I told you, I wasn’t anxious about the American, global and Internet economies.  I have had more headaches this month than in the past 3 years.  It’s stressful.  But at the same time, it’s amazing to me that we are one week away from the most important political moment in the history of the country for anybody under 50 and yet few in our industry media landscape are discussing  the impact the new administration can have on the startup economy.  Here’s a quick example: Obama himself probably understands the issues with Sarbanes-Oxley and how closed the IPO market has been for 6 years.   My guess is that these laws will be rewritten within 18 months.  This will be a vital change for an industry that has become blinded by the illusion that every little company can be acquired by Google.

The United States has faced significantly worse crises than what we face now.  The difference is that we are no longer a nation of shared sacrifice.  We are a nation and a world of wealth creators.  It is how we have been trained and how we train aspiring Americas.

We have spent three weeks all aflutter about the Sequoia slides and the Calacannis doomsday scenarios.  Meanwhile, the country is about to be given its most progressive politician since Franklin Roosevelt.

The Obama presidency will not be a panacea for this financial crisis.  But if the global economy has become this interconnected then surely the prospect of a progressive American presidency can catalyze meaningful world change.

Roger, the only thing we know is that we cannot know.  The difference between entrepreneurs and everybody else is a higher appetite for risk and an abiding faith that the glass of progress is half-full.  Like everybody who gets older, I’m getting more pragmatic with age.

But it sure feels good to think young again.

A Startup Academy

We have taken to calling our program at TechAviv — an academy.  As a result, several potential backers have asked us to elaborate on our program.  Of course, this implies that we have a set program which we were trying to avoid.  Our process was to examine the current models at Ycombinator, SeedCamp, Betaworks and others and riff on those for the Israeli market.  Frankly, we just wanted to replicate what was working for those programs, see how it went in Israel, and iterate our academy.

But thoughtful investors have a way of getting entrepreneurs with frothy self-confidence to work harder for an investment.  It’s never easy (unless you’re name is Andressen) and raising capital for a concept stage education venture in the past month was not as easy as going public was for the companies with “Linux” in their corporate name circa 1999.

Good questions have been raised. They generally boil down to this:  What would your academy do if we gave you $5mm to give birth to 100 Israeli-lead companies?

At TechAviv, we are focused on taking the dream in somebody’s brain and turning that into an entity  worthy of additional funding.  We agree with yesterday’s post by Charlie O’Donnell, that these services are often not even worthy of being called companies.  However, we also think that the digital revolution is still in its infancy.  Huge value will be created in the decade to come as the ubiquitous high-speed Internet becomes more deeply woven into the fabric of global society.

The volatility in the marketplace today, this month and for the next year may not abate.   At TechAviv we want to create an institution that focuses less on the macroeconomic conditions and invests its resources in building useful services that actually improve people’s lives.  We believe as our chief intellectual influence Paul Graham does that:

If we’ve learned one thing from funding so many startups, it’s that they succeed or fail based on the qualities of the founders. The economy has some effect, certainly, but as a predictor of success it’s rounding error compared to the founders.

In good times and bad, we believe founders will prevail.  This month’s conventional wisdom is that seed stage investing will suffer from the current and protracted recession.  Clearly, the recessionary environment creates less collective psychological excitement for investors and that the consequences of this group depression can create fundraising challenges.  But talented, frugal innovators with simply-articulated concepts can  get funded and succeed in any enviroment.

The trick is identifying the talented innovators.  More on that tomorrow.