Oxyfish

I use the Wordpress Database Backup plugin to send automated backups of my blog to a dedicated Gmail account on a daily basis. When the disk filled up on my server, the blog database was corrupted. Fortunately, it was the work of about 10 minutes to restore from the backup. Thank heaven for fire-and-forget backup strategies!

Frontier Airlines came through again for me last night. Here’s the story.

I was on United 595 from Denver to SFO, departing at 5:54. On the takeoff roll, the plane started to shudder violently, and even the seasoned passengers started to look a bit alarmed. We climbed out successfully, but it was obvious that as the pilots increased power, the vibration returned. Unsurprisingly, about 10 minutes later, the pilot announced that we were returning to Denver.

After deboarding, the craziness began. They had two more flights to SFO that night, but both were pretty full, and both were hours late. They apparently found another (smaller) plane for us, but couldn’t find a crew (it wasn’t a 767, so our crew couldn’t fly it). After several hours of dithering, they finally canceled the flight for the night, and started getting hundreds of people hotel rooms.

I hustled over to Terminal A to see if I could get on the last Frontier flight out, at 9:35pm. They had one seat left, and the gate agent was extremely nice, allowing me to purchase a ticket and managing to get me a great seat. It looked like my colleague Jeff was going to get left behind, but she offered to write down my credit card number, so if they could find him a seat at the last minute he wouldn’t have to be held up by getting the ticket bought first. Sure enough, one of the seats freed up, so they got him on the flight, then processed the purchase of his ticket. That’s going above and beyond.

I appreciate that the United folks had a nightmare on their hands, but they really didn’t handle it very well. So it just highlighted the contrast when the Frontier folks were nice and competent. I will be flying Frontier more often.

I randomly saw this question on LinkedIn, and it intrigued me enough to write an answer. I will say, I think it’s a pretty innovative way for a presidential candidate to use the net.

What ideas do you have to keep America competitive in the years ahead?

Here is my answer, which can be found on page 40:

I think there is a fundamental conflict between trying to “protect American jobs” and “increase American competitiveness.” For America to be competitive, Americans need to be competitive. That means they need to be willing to upgrade their skills and change with the times. We need to stop putting up regulations because we are afraid of competition with foreign firms or afraid immigrants will come take our jobs. We need to drop trade barriers and relax immigration rules. Will this be hard on our citizens? Of course! But as any small business owner knows, you can’t stay competitive these days without undergoing frequent and sometimes painful change.

We can mitigate the pain by investing more heavily in education, so our citizens are individually better equipped to compete. And we can invest nationally in energy, healthcare, and technology innovation, to make sure we have the infrastructure. But in my opinion, we will not remain competitive as a nation if we overprotect our citizens.

No, that’s not an oxymoron, although a few hours ago I would have said otherwise. The web seems to abound with stories of disgruntled and unhappy customers, and this was almost one of them. But this story has a happy ending.

I bought a salad in the airport, to eat for dinner on the 5:50pm Frontier flight from DEN to SFO. Unfortunately, I left on the seat next to me at the gate. I remembered it just as I boarded the plane, but the flight attendant refused to let me leave the plane to go get it, citing “security”. WTF?

My salad was about 20 yards away. There was 20 minutes before departure. I and the salad had both passed security screening. What possible security problem could there be? I was stunned. The plane wasn’t even full, there was no backup on the jetway. I even went back to the front after everyone was on, with at least 5 minutes before the door was shut, and was not allowed to get off for the 60 seconds it would have taken to get my salad.

I was hungry and pissed off for the first hour of the flight. I composed the first draft of this blog post, ripping them a new one about “security theatre” and other crap. Then the flight attendant who had refused me dropped a folded note on my tray table (I was working and had headphones on). The note said on the outside “My Apologies”, and inside read:

Sir:

After reviewing the regulations regarding passenger deplaning and reboarding, my interpretation was not correct.

Please accept my apology, and use these free DirecTV coupons to help pay for the dinner you left in Denver.

What’s more, he even signed it with his full name and employee number. Wow! I have to say, I really appreciate when people have enough self esteem to question themselves, do some research, and then own up to being wrong and try to make it right.

I am now a big fan of Frontier Airlines, because not only have they trained their people to provide genuinely good service, but they seem to foster a culture of learning from mistakes. And while in any customer service training course you can read stories like this one, they don’t happen as often in real life as they should, and they should be rewarded. I look forward to flying Frontier again!

The Richter Scales most recent video, Here Comes Another Bubble, won the Webby award in the Viral Video category. We are so excited! CNN even picked up the story. We’re now trying to figure out who from the group can make it to NYC on June 9 to be at the awards ceremony. We’ve even offered to sing the song live.

If you are in the Bay Area and want to hear the Bubble song live, come see us tomorrow night in Palo Alto!

UPDATE: Kara Swisher wrote a post congratulating us - thanks, Kara!

This Thursday night at 8pm, if you happen to find yourself near Palo Alto, come by and hear the Richter Scales sing at the Palo Alto Arts Center at 1313 Newell. You can hear Here Comes Another Bubble performed live, among other funny originals and some covers. Also featuring another local a cappella group, Redshift. Hope to see some friends there!

In a previous post I made reference to the lack of technology available to publishers to increase the value of their premium inventory, which in many cases makes up 80+% of their total revenue, even though it is often a much smaller percentage of their total impressions.  One of the main ways to make it more valuable to brand advertisers is to give them a more targeted audience, and charge higher CPMs because of the increased efficiency to the advertiser.  Many publishers are reluctant to do this, however, for two reasons: either the don’t have the data, or their afraid that targeting will fragment their inventory.  They know that without good inventory tools, inventory fragementation could result in lower overall revenue.

There are a number of ways to collect and target on better data: behavioral targeting, user registration, and data exchanges are just a few examples. And, there are a number of companies like Tacoda or NextAction that can help provide data that advertisers will pay more for.

The second reason above, fragmentation, hasn’t gotten as much attention.  Brand advertisers want a targeted audience with broad reach, so publishers end up building broad products that take inventory from many different parts of their site.  While it’s clear that selling Moms for $20 CPM is better than selling my Entertainment section (which overlaps by 50%) for $15, if I’m also stealing inventory from my $25 CPM Travel section, that’s not a good thing.  This kind of data can be highly complex, and quickly outstrips an ad operations team’s spreadsheet skills.  The industry is just beginning to deliver the tools that publishers need to really take advantage of better data to generate more revenue, and Yieldex is at the forefront.

There have been a flurry of great blog posts lately about how broken brand advertising is online, mostly because we are trying to measure it the wrong way. My own contribution to this effort notes that click through rates are the “hammer” of online advertising, and when all you have is a hammer, well, you know the rest.

Dave Morgan has a recent one about vertical publishers, where he talks about brand advertisers:

Major brand advertisers are starting to take online very, very seriously; just look at the announcement earlier this week that General Motors plans to shift 50% of its ad spend online within three years. Just look at all of the pioneering online ad work done recently by big offline brands like Coca-Cola, Pepsi, Snapple and P&G. These brands are now making online a big part of their overall marketing programs, and they are not just focused on direct-marketing objectives. No, while performance objectives will always be a big part of the online ad ecosystem, more and more marketers are looking to online ads to help drive consumer perception objectives. Yes, they are using online to drive brand-oriented objectives like awareness, favorability and purchase intent.

He then says “the portals and major online ad platforms are probably not going to be the ones selling it [ad space]“, but that vertical networks will fill the void.

John Battelle wrote on a similar topic, pointing out how technology is winning over talent in the brand wars - and this is not a good thing. He asks:

Do we sell inventory to the highest bidder via algorithms, automated processes, and platforms? Or do partner with marketers and creators of media to build brands - both media brands, and consumer marketing brands?

He then goes on to assert that the obsession with chasing Google has led the likes of Microsoft, Yahoo, and AOL to ignore their strength in brand building.

Cory Treffiletti wrote a good one, too, asking when we are going to stop using clicks as a primary measure? He has a good description of the difference between direct response and brand advertising:

Fundamentally all advertising exists to do one thing: increase sales and/or market share. If the goal is to generate an immediate response, meaning the acquisition of information or a customer in a single session generated via a click, then we can consider that to be a direct response effort. If the goal is to drive an increase in sales, market share or customers over a longer period of time (basically anything beyond that initial single session) we should likely consider that to be a branding campaign, or what is most typically now referred to as a brand response effort.

He then goes on to detail why click-through rates are not necessarily a good proxy for brand campaign success.

Finally, Eric Picard has an excellent interview with Jeff Einstein, where Jeff says:

We’ve been obsessed with our own ability to measure performance (regardless of the metric) since day one online. Our obsession with efficiency and scale all but eliminates the quality of the message from the consideration set, largely because quality is much more difficult to measure and formulize. We can tinker all we want with metrics and formats, but as long as we remain fixated on efficiency and scale as the keys to the kingdom, performance will continue to decline.

I couldn’t agree more. Reminds me of trying to use standardized testing to measure everything kids are supposed to learn in elementary school. Sure, it’s okay for basic math and reading, but our kids aren’t learning how to learn, because we only “teach to the test”. Brand advertising (and teaching) still requires a generous helping of creativity and talent.

UPDATE: Another great blog post by David Koretz asks if increasing CTR can actually hurt your brand:

If an advertiser’s goal is truly branding, then driving clicks by annoying the user is a horrible approach. Not only will it detract from the user experience, but it will also damage the very brand it was intending to build.

Well worth reading.

Brand advertising on the web is suffering from a major problem: too much measurability. To be more specific, too much measurability of the wrong things.

Click-through rates were the first measure of online ad effectiveness, and seemed like the holy grail of ad measurement. Finally, advertisers could figure out which half of their ad dollars were wasted. I think the first well-known demonstration of the shortcomings of CTR as a measurement was the MCI “Shop Naked” ad back in 1996. The ad had tremendous click-through, but nobody actually bought anything.

This spurred innovation in measuring conversions. For direct marketers, measuring conversions really is the holy grail, becuase you can immediately understand if your ad is generating more margin than it is costing. The problem is, both of these metrics, CTR and conversion rate, are direct reponse metrics.

Brand advertisers typically have very different campaign objectives. Does Coca-Cola expect you to click through and buy a Diet Coke? Does P&G expect you to click through and buy some Tide? Of course not, but these campaigns are being force-fit into having direct-reponse objectives, because that’s what we can measure immediately on the web.

Campaign objectives for brand advertisers typically include affecting a customer’s attitude and propensity to buy, their liklihood to recommend to a friend, and simple brand awareness. CTRs and conversion rates are not good proxies for these objectives. Measuring the effectiveness of campaigns on the internet probably requires the same old-fashioned techniques as measuring the effectiveness of TV or radio ads: panels, questionnaires, and close analysis of the effect on local sales.

I say “probably” because there are always new measurements on the internet, and some may turn out to be good proxies for brand objectives. Look at some of the innovations that are coming along now: brand engagement metrics with widgets, for example, or some of the video ads that VideoEgg and others are touting. However, those have yet to really prove their effectiveness relative to the real campaign objectives (witness the number of games where the players can’t name the brand that sponsored them). And, they don’t typically have the reach that brand advertisers need to make meaningful buys.

What is particularly effective for brand advertisers on the web is their ability to target. While Oprah may be a pretty good proxy for Moms on TV, on the web it’s possible for Minute Maid to target exclusively Moms. And instead of limiting their reach to content that is aimed at Moms, they can use behavioral targeting and other techniques to find Moms wherever they are on a network of sites. This can make brand buys on the internet much more efficient, assuming they can measure them appropriately.

Another effective brand advertising technique that only the internet really offers is frequency capping. Most publishers and ad networks can offer frequency caps that allow a brand advertiser’s message to reach their audience an optimal number of times, without burning them out. We all have had the experience of seeing the same TV ad so many times you actually change the channel - with the internet, that doesn’t have to happen.

Brand advertisers need to start to embrace online advertising for what it can offer, targeting and frequency capping, and stop trying to use direct response metrics to measure their campaign effectiveness. When all you have is a hammer, everything starts to look like a nail. Click-through rates are the hammer of online advertising, and brand advertisers are getting nailed by them.

The Richter Scales recent video, Here Comes Another Bubble, was nominated for the 2008 Yahoo Video awards. Go and vote for us today!

Click here to vote!

UPDATE: We didn’t win, but we did get a nice T-Shirt…

I’ve been talking to a lot of publishers recently, and I’ve gotten some very consistent feedback: a relatively small percentage of their impressions often make up a disproportionate percentage of their revenue. This is not news, it’s a classic 80/20 rule (although the numbers may differ - some are 90/10!). And every publisher knows what inventory I’m talking about: it’s perennialliy sold out, and the sales guys are all fighting over who gets to sell it next month. Here’s a slide illustrating what I’m talking about:

Now this is oversimplified, but typically this “premium” or even “super-premium” inventory is sold to brand advertisers. Deals can be time-based sponsorships (typically with impression guarantees) or guaranteed-impression buys at relatively high CPMs. The remaining inventory is generally either sold on a CPA/CPC basis, at much lower eCPMs, or sent to a remnant network or ad exchange for a low CPM or revenue share.

What is interesting about this from an industry level is the amount of time and energy the industry has spent on optimizing the value of the 80% of the impressions that are not premium, and by comparison how little progress has been made on increasing the value of the inventory that makes up the majority of the revenue. Performance-based ad networks have sprung up everywhere, and ad serving providers like DoubleClick have products that are focused on increasing click-through rates, and therefore revenues, from performance-based ads. But these only help turn your $0.25 CPMs into $0.50 CPMs, they don’t do anything for your $10 CPM premium inventory.

The reason is not hard to guess: performance ads, because they are directly measurable, are much easier to optimize. Lots of people have had roughly the same idea: if I crunch enough data, I can more accurately predict who is likely to click on which ads, and therefore I can get more revenue out of less inventory.

Brand advertising is much less amenable to optimization in this same way, because click-through rates aren’t typically a good proxy for brand campaign objectives (look for a future post on this topic). To get more out of your premium inventory, you have to either make it more valuable to the advertisers, by adding more data and targeting more tightly, or you need to utilize it better, so you waste less through fragmentation and inaccurate allocation. Yieldex is focused on providing tools that help publishers maximize the value of their premium inventory, which is the 20% of the inventory that results in 80% of the revenue.

Once upon a time, there was a merry band of troubadors called the Richter Scales. They enjoyed making music and entertaining people, never trying to make any money at it.

One day they discovered a new country, YouTubeLand. They thought they might entertain some of the residents there. So they produced a video and sent it over, where some people enjoyed it.

Emboldened, they produced another. This one even more people enjoyed. But one person felt the video was rude to her, and started shouting that the Richters had broken the law. Without ever telling the Richters what she wanted, she used a hammer to banish the video from the land.

Confused, the Richters consulted wizards, and learned that even wizards disagreed on the laws of this new land. They felt bad that some people thought they were rude, though they were new to the land, and there were many other loutish people there already.

After much internal consultation, and encouragement from many native denizens, the Richters decided to venture forth into YouTubeLand again. They took out the objectionable parts, and replaced them with funnier ones. And they made up for their unintentional rudeness by giving credit in a new and clever way, which some in the land hailed as a new standard for virtue.

And everyone lived happily ever after. Well, most people, anyway.

Every company has a “how we got started” story. For example, here’s the NetGravity startup story. This is the story of how I got involved in Yieldex.

First, a little background (bear with me – this is relevant). After we sold NetGravity, and I took some time off, I was thinking about a career change: get a PhD and become a computer science professor. I’ve always loved to lecture (a trait shared by many VCs, which is not necessarily a good thing), and I thought I might enjoy the pure intellectual stimulation of academia.

I began by looking for an interesting topic, because I got some advice from professor friends that most PhD students spend the first couple years just trying to pick their thesis topic. One hard problem we had worked on at NetGravity was the “overlapping inventory” problem, so I wrote a short paper on the topic to present to the HPTS Workshop, a fairly exclusive enclave of the top database academics in the world, including Jim Gray, Ed Codd, and Michael Stonebraker. Mostly I wanted to see if they could tell me if the problem had been solved before. I got generally good feedback that it looked like an interesting and unsolved problem.

For a variety of reasons, I ended up going into VC instead, and put the problem on the back burner.

Doug Cosman was one of the key employees at MatchLogic, another early internet advertising startup that was bought by Excite. Doug’s work after Excite led to the key insights that underlie the Yieldex technology, and he raised some angel funding to pursue developing those ideas. Doug was searching patents and other sources for prior art during his patent application when he came across my paper on the HPTS web site, which by then was ranked highly by Google. In a fairly random coincidence, one of Doug’s angel investors at Sequel Ventures, Chris Scoggins, is a friend of mine, and put Doug in touch with me directly.

I have to admit, I was pretty skeptical that some guy in Boulder had solved a problem that had pretty much stumped the industry for the better part of 10 years - classic Silicon Valley arrogance. I put off talking to him for some months, but fortunately he was persistent. Finally he came out to visit, and in a four-hour session with the whiteboard, convinced me he had a novel and workable solution.

Learning about his solution re-ignited my own interest in the problem and the space. Of course, it didn’t hurt that DoubleClick had just been acquired for $3b and aQuantive for $6b, and the space was hot in general. The more phone calls and meetings I had, the more clear it became to me that this was still a huge problem for the industry, and that nobody had solved it well. Also, for me personally, the process of doing diligence and getting back in touch with a number of people reminded me that I had a lot of personal credibility and expertise in this area. Very quickly I made the personal transition from wanting to invest to wanting to be involved.

Fortunately, Doug and his angels had already talked about hiring a CEO in the Bay Area, so it was fairly straightforward from that point on.

The Woodside guys have been great to work with, they have been incredibly supportive and helpful. They invested in the Series A, and I’m still very much a part of the Woodside Fund family, now as a Venture Partner and a portfolio company CEO instead of a Managing Director.

I love this article in The Onion, purportedly by Jimmy Carter, not because it’s so funny (although it is pretty funny), but because of how wickedly they send up everybody else in the 2008 race by pointing out how much better Jimmy Carter is on every dimension.

Reminded me a little bit of how rarely people change their opinions - most people seem to think Jimmy Carter was a terrible President. Here’s another example, from the Wall Street Journal a while ago (blogged about here):

Starting 30 years ago, [Julian] Simon (who died in 1998) told anyone who would listen — which wasn’t many people — that the faddish declinism of that era was bunk. He called the “Global 2000″ report “globaloney.” Armed with an arsenal of factual missiles, he showed that life on Earth was getting better, and that the combination of free markets and human ingenuity was the recipe for solving environmental and economic problems. Mr. [Paul] Ehrlich, in response, said Simon proved that the one thing the world isn’t running out of “is lunatics.”

Mr. Ehrlich, whose every prediction turned out wrong, won a MacArthur Foundation “genius award”; Simon, who got the story right, never won so much as a McDonald’s hamburger. But now who looks like the lunatic? This latest survey of the planet is certainly sweet vindication of Simon and others, like Herman Kahn, who in the 1970s dared challenge the “settled science.” (Are you listening, global-warming alarmists?)

I’m looking for a product manager to own defining the features and functionality of our product. Here’s the spec, please let me know if you know anyone. Thanks!

Senior Director of Product Management

Brand advertising dollars are skyrocketing on the internet, and publisher traffic growth is not keeping up, creating a pressing need for optimization tools that give publishers the inventory control required to capture these ad dollars. Yieldex is a venture-funded startup with patent-pending optimization algorithms, built by some of the folks who invented the first online ad systems at NetGravity and Matchlogic.

Our next key hire is a product person, someone who knows the ad operations side from inside and out, and can make sure the product we build has the “wow” features that deliver huge value to our customers, without neglecting the required functionality that customers need. Ideally this person has worked at a publisher or ad network between ad sales and the ad technology group, and knows both how the sales process works, and what existing systems are currently capable of. This position could be Senior Product Manager, Director or even VP level, but we need a doer, not a manager. This person will be gathering feedback from customers, writing functional specs, and working with the engineers on a daily basis to refine the product for the market. Key attributes are the smarts to integrate lots of complex input, the ability to work with both customers and engineers, and the organizational skill to make sure nothing falls through the cracks. Actual product management experience is a plus, but not a requirement.

The engineering team is located in Boulder, CO, and the business team is in San Mateo, CA. This position could be either location, but would require some travel between them, and in particular would need to spend time with the engineers in Boulder. There would also be travel to customers.

Please contact jobs at yieldex.com to apply. Thank you.

It’s clear to me now that I’ve always had an engineer’s disdain for sales people. After all, how hard can it be? Our great product practically sells itself. As a CTO, the sales calls I went on were all easy and almost fun. My job was to talk up the features and functionality of the product, and wow the customer with how smart we were and how great the architecture was at solving the problem they had. No problem. How little I knew about the constant follow-up, the customer requests, the research and preparation and effort that went into understanding an account well enough to close a million-dollar sale. Now that I’m the head sales guy, I’m learning the hard way. My only hope is that I’ve started to understand how little I actually know, and I’m getting much better at asking for advice and coaching.

I had a classic sales situation the other day: a champion at a top prospect who loved our product, and the next step was to vet it with the technology folks. We set up a conference call for two weeks out. Then it was rescheduled for two more weeks out. Then they sent an Outlook appointment update - not even the courtesy of an email or a phone call - to reschedule again for over two months later. Then our champion left. Poof - no more top prospect. Of course, as an entrepreneur we never say die, and I’m back in there trying to make progress, but this is the startup roller-coaster.

I wrote a while ago about my sister Kira’s album of kid’s yoga songs. Now the fine judges at the Independent Music Awards have selected her Dance for the Sun album as the winner of the Children’s Music category in their 7th annual contest. Not only that, but her song Caterpillar, Caterpillar (with me singing the bass line) was selected the best Children’s Music song. Hooray for Kira!

Go buy an album, from her site Fireflies Yoga, or from CDBaby. Especially if you have kids.

Our video was taken down from YouTube based on a DMCA notice. We have not see the notice, so we don’t know who or why. Kara Swisher posted in our favor, Valleywag had some criticism. We are in the process of compiling the list of photo credits and posting it, not because some self-styled copyright cops are demanding it, but because we would want credit if someone re-used our work. But we’re not firing off DMCA take-down notices to the several folks on YouTube who have already done it (deliberately not linked here). Nor are we threating physical harm, as some of the commenters on Flickr seem to be advocating. You can tell I’m kinda mad about the way this was handled.

In the meantime, you can still (for now) see it on Yahoo or FunnyOrDie.

Kara Swisher says “pure genius“. Robert Scoble finds it so funny he spews Diet Coke through his nose. This could be my 15 minutes of internet fame! Matt Hempey of the Richter Scales deserves all the credit, he wrote the song, sang the solo, and created the entire video, I just sing the bass line and show up in the video for a few milliseconds. Enjoy!

UPDATE: Updated to version 1.1 of the video.

After a stint as a VC, some parts of being an entrepreneur seem easier. For example, it’s much easier to see things from the investor and the board perspective, because you’ve been in their seats. You know how to pitch to investors, and what information they need. You know what is relevant to the board and what is not, and generally how to handle a board meeting.

There are a few things you forget after being a VC for a while. Hiring and recruiting is harder than I remembered - not the sales part, but just finding people and interviewing them. Making tough decisions about how to spend your limited cash and other resources is harder than I remembered. There are a million and one details that you don’t have an executive assistant or a CFO to handle for you. Travel planning alone is a time sink.

I have to reach out a lot more proactively. I didn’t realize how easy it was to just answer the phone and email all day, but as a VC, a lot comes at you. When I was a VC, it took incredible discipline for me to put that aside and actually be proactive, and I wasn’t doing it very well. As a CEO, the phone doesn’t ring much, which means I reach out a lot more.

One other thing that is much easier as an entrepreneur is the focus. I find that my top few priorities are quite obvious, and I’m not really at loose ends about what is most important to be working on right now. Sometimes there are too many top priorities, and it’s almost paralyzing, but mostly I can just crank without too much reflection. As a VC, I found that much harder. While there were still a million things to do, deciding which ones were priorities was much harder for me. Of course, there were some obvious times when we were doing financings and such, but often I had many different potentially valuable things I could do, and no good way to decide between them. And the feedback cycle was so long that it was hard to even come up with good rules of thumb.

I travel a lot more now, visiting potential customers and partners, and my kids are having to adjust to having me gone more, which can be heartbreaking. I’ve been lucky to have dinner with my kids an awful lot the last few years, and that’s getting harder. But my family definitely senses my excitement and enthusiasm, which helps a lot.

By the way, I’m not the only one who has done this. Danial Faizullabhoy also did this relatively recently, you could ask him what it’s like. Other folks I know who made this transition are Darlene Mann and Perry Wu. There are also VCs who occasionally step into CEO roles for a while, like Alex Mendez at Storm Ventures.