Tuesday, October 2, 2007

It makes a village

A lot of big cities are really small communities.

For example, there is one big city that is glued to a columnist named Mike Causey. No, he doesn't report on bake sales or Edna's trip to London. Instead, he reports on Joe's pension or Wanda's health care plan. Pretty important stuff if you live in Washington and work for the Federal Government.

But there's another village - Silicon Valley. Earlier today I read this Twitter from Guy Kawasaki:

Taking crap in the Mercury. I love it.

"The Mercury" is the San Jose Mercury News. Instead of bake sales or government shutdowns, it reports on VCs and startups. Here are some of the comments that San Jose Mercury News readers directed toward Kawasaki:

"Sounds like Kawasaki is not the guru that he and the paper portray him to be. A guru would have such insight into the industry and trends that his comments and views would be cutting edge. But it appears that Kawasaki put his money into ideas that he felt were the best and he didn't [fare] well. Time to call him something else and guru would not be it."

"Having been turned down by Garage twice for venture funding, I am symphathetic to the idea that Guy is a great salesman but not such a smart judge of a good investment."

The article commented on Kawasaki's so-called "failures":

In May, Kawasaki started Truemors, a site specializing in what it calls "true rumors" submitted by readers. It cost less than $13,000 to launch and was almost immediately dubbed "the worst site ever" by a leading European technology news site....

For nine years, Kawasaki and his partners [at Garage Technology Ventures] had invested millions of dollars in companies that seemed like smart bets. They had their share of successes, but nothing on the order of Google or Yahoo.

Meanwhile, ideas he dismissed became stock market sensations.

Like Yahoo. In 1995, venture capitalist Michael Moritz of Sequoia Capital asked Kawasaki if he'd like to interview to be chief executive of Yahoo. "It was a list of David and Jerry's (co-founders Filo and Yang) favorite Web sites," Kawasaki recalled. "It had no business plan."

Kawasaki said no. Years passed. Two guys from Stanford created yet another search engine. "The 15th search engine - what a dumb idea," Kawasaki quipped about his reaction. That turned into Google.

"The only thing you can conclude is that it's a crap shoot," Kawasaki said in a recent interview at his home office in Atherton. "You have no idea what is going to succeed."

The conclusion that Kawasaki reached - and part of the reason that he started Truemors for $13,000 - was that the venture funding model was itself questionable.

Bill Reichert, Kawasaki's partner at Garage Technology Ventures, said the tipping point for his partner came after Kawasaki chaired a panel discussion featuring start-ups like Hot or Not - a Web site where men and women submit photos to be rated by strangers - and Plenty of Fish - a free dating site.

Neither site had raised venture capital, but both were enjoying advertising sales of more than a million dollars a year. That made it clear to the folks at Garage that the problem was the venture capital model itself, which seemed out of whack.

And about that negative review?

Earlier this month, the European news outfit with the scathing early review recanted. "We're big enough to admit that Truemors is definitely not the world's worst Web site any longer," Martin Veitch, executive editor of IT Week, wrote in a Sept. 10 article on theinquirer.net, a technology news site.

But the negative review probably didn't hurt:

Kawasaki said the coverage was responsible for a huge spike in page views, which are now averaging about 150,000 a month, according to Google analytics.

Well, I'm not quite at that level yet, so I can't necessarily criticize Kawasaki on his "failure."

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