"The cave is collapsing!" -- Leia Organa
"This is no cave." -- Han Solo
Here’s a composite of a three discussions I’ve had with whip-smart founders over the past couple of months about building companies on the backs of existing ecosystems like YouTube and Facebook.
“Jason, I’m building a startup around the @Youtube ecosystem -- which I know from your writing that you’ve got some issues with -- we want you to invest!” said the founder.
“That’s an awesome set of tools you’ve built there. Clever indeed. However, if any of them work, you know YouTube is going to copy them and make them free, right?” I replied.
“But YouTube is going to be 10x bigger than it is in the next five years... and you said if it was a stand-alone company it would be worth $50b!” he replied.
“I did say that, and that’s even more reason for you to be worried. As they get bigger and more powerful, they will have even more resources and rationale to rebuild your ideas -- and they will have an even bigger firehouse to spit it out to customers,” I said.
“But look at all the examples of huge companies built off of large ecosystems: Norton Antivirus on Windows is a Fortune 500 company, Hootsuite exploded on the back of Twitter and it has a $1b valuation, Buddy Media rocked Facebook and sold for $800M,” he said.
“You left out PayPal... built off the back of Ebay for billions and now the most valuable piece of the company,” I added.
Then I said, “Now, while all of the examples above are true, they are a small, small percentage of founders who were able to get escape velocity from the exogorth, the space slug in Star Wars that almost ate the Millennium Falcon.”
Ironically, as I was having this discussion, I found out that YouTube had built a tool that did EXACTLY what one of the founders in the above composite had built: a tool to help you connect with your top YouTube fans!
Spectacular news broke yesterday that Jeff Bezos bought the Washington Post.
Why WaPo was sold is obvious: running a newspaper sucks.
It really, really, really sucks. Let’s count the ways:
1. Craigslist took all your classifieds
2. Niche sites took your audience and your top journalists
3. No one wants dead trees on their doorstep
4. News breaks, is processed and largely resolved in the same day on Twitter
5. Some of the country’s last unions are grinding down already ground-down newspapers
It’s just a huge headache with little payoff.
Which leads us to wonder, ‘Why did Jeff do it?’
Also for that matter, why has Warren Buffett been buying dozens of small papers up over the past couple of years, and why did Red Sox owner John Henry just buy the Boston Globe?
Here are the six leading theories and what I think of each:
1. EGO: Newspapers are the new sports teams for the billionaire set
There is probably some truth to this. At some point, rich folks realize they’re gonna die with a bunch of money in the bank they never deployed in service of either their legacy, fun, society’s benefit or straight-up ego.
And it’s not just old dudes like Buffett and Sam Zell.
[ Summary: Stretch goals are important, and the ones we set for the first LAUNCH Hackathon this past March resulted in a team of three unknown 20-somethings from Pittsburgh building a killer product in 48 hours, landing over $100k in investment on the spot and later earning a slot at a prestigious accelerator. On November 8-10 we host LAUNCH Hackathon 2 with stretch goals of 1k *actual* developers, $250k in investment prizes and five teams funded or accepted to accelerators. ]
At some point 10 years ago I overheard the buzzword ‘stretch goals’ and it stuck in my brain.
It might have been from an ex who was at Harvard Business School, or from reading Jack Welch.
Stretch goals, as far as I understand them, are lofty goals that you set even though you have no idea how to reach them at the time.
My Three Stretch Goals
Last year I started setting stretch goals for myself and my kick-ass teams.
Three notable ones at LAUNCH:
a) the largest startup technology conference / hit 5k attendees for the 2013 LAUNCH Festival
b) the largest hackathon with 300 *real* participants
c) the largest hackathon prize ever
Well, we had 6k folks come to the LAUNCH Festival in March, resulting in folks coming to me for the past six months saying, ‘That was amazing! It was huge!’ We blew past the stretch goal by 20%. Wow.
The Unbearable Wearable: Google Glass is Brilliant, Loathsome and Not Inevitable (or "Take Those off before I Punch You in the Face!")
@Scobleizer's infamous Google Glass photo, which his wife took at their home.
I’ve run into several friends wearing Google Glass in the past three months, and I have three words of advice for them:
Take. Them. Off.
First, you look like an idiot.
Second, you’re killing the party.
Third, are you recording me right now?!?
First Encounter: “Are You Recording Right Now?”
The first time I ran into these magical devices in the wild was at a conference. A fairly notable person walked up to me wearing them.
I asked, “How do I know if you’re recording me?”
“You don’t!” he replied before correcting himself. “Well, I wouldn’t do that without telling you.”
“But how do I know? I’m not really comfortable with trusting folks to be recording me or not. I mean, how do we have a real, honest discussion if I don’t know if you’re recording it?” I offered.
“Well, you might be able to see me turn the camera on... See, you have to click to record,” he replied.
So I’m supposed to just trust every person wearing these that they’re not recording me.
[ LAUNCH founder Jason Calacanis's fireside chat with entrepreneur/investor Mitch Kapor before a packed house. Photo by Philip Szeto. ]
We were awed and inspired by the 500+ educators, entrepreneurs and developers who joined us for our 2nd annual LAUNCH Education & Kids event at Microsoft's Mountain View campus June 26-27.
You'll find the startup demos and investor panels on our YouTube channel here.
[ Fireside chats with entrepreneur/investor Mitch Kapor, Lynda Weinman of lynda.com and Daphne Koller of Coursera coming this summer as episodes of "This Week in Startups." ]
All 20 companies (with contact info) are in this spreadsheet. The 2013 agenda is here.
@Jason announced that the new LAUNCH Fund will seek to invest in three startups from this event (pending due diligence): LocoMotive Labs, STEAM Carnival & Kidaptive.
The 2013 LAUNCH Education & Kids Winners:
- Best in Show (Overall Winner): Kidaptive (entertaining and adaptive content that helps children learn)
- Most Impactful: CK-12 Foundation (free, high-quality open content in the STEM subjects)
- Best Presentation: STEAM Carnival (re-imagining the carnival with robots, fire and lasers)
- Best Hardware [ tie ]: Roominate (wired dollhouse building kit for girls ages 6+) and Linkbots (modular robotic, brings project from idea to working prototype)
- Best Technology: GuitarBots (makes guitar learning fun and motivating)
- Best Design: LocoMotive Labs (apps to empower kids with special needs)
- Audience Favorite: STEAM Carnival
Big thanks to this year's LAUNCH Education & Kids lead sponsor Pearson as well as sponsors Mandrill, StudyMode, LittleBits and UCSF.