Ajax Girl

I guess the upside is that a stock can’t fall below zero, so there’s an end in sight to the ongoing destruction of jobs and shareholder wealth at Yahoo. The stock closed at $13.76 today, down another 5.6%. And this isn’t just part of the market’s overall meltdown - the Nasdaq fell just 0.8% today.

At this point I’ve moved beyond wondering how Yahoo’s senior management manages to keep themselves in power. The private equity funds who agreed to let Yang and Decker stay in power after the shareholder vote last summer have some real explaining to do to their investors, too.

Yahoo has no game plan, and the markets tend to notice these things. It’s time for an intervention.

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Ron Conway, one of Silicon Valley’s most prolific angel investors (and he was also an early investor in Google), wrote an email yesterday to the CEOs of his portfolio companies. In no uncertain terms he outlines a bleak immediate future, and gives advice to his startups.

It’s the same advice, actually, that he gave in 2000 during the tech meltdown that was then happening in real time. Lower your burn rates to get at least 3 more months out of your current money, and raise money right now if you can. It’s very similar to what Sequoia (and other VCs, I’m sure) are telling their startups.

One thing Ron made clear in a conversation with me today. He’s not worried about the state of innovation in Silicon Valley. He’s not pessimistic about the future of technology at all. What he is concerned with is protecting the portion of his portfolio companies who don’t currently have a large cash position to weather a storm, and he’s sharing his experience from the last downturn to help them through this one.

The full text of Ron’s email is below, along with similar emails he sent on April 17th 2000 and May 10th 2000.

——— Forwarded message ———-
From: Ron Conway
Date: Tue, Oct 7, 2008 at 12:12 PM
Subject: IMPORTANT PLEASE READ ASAP …..REGARDING CURRENT MARKET CONDITIONS…Confidential

We have all been absorbed by the turmoil in the financial markets the past few weeks

Unlike the turmoil of 2000 when the “action” was centered right here in Silicon Valley this time is it centered on Wall Street…..but it has rippled to the west coast quickly and we will not be “immune” to its drastic effects.

I was an active investor in 2000 when the “bubble burst” and remember it vividly and want to give you the SAME EXACT advice I gave to my portfolio company CEOs back then.

I have pasted in the emails I sent on April 17th 2000 and May 10th 2000 and every word applies today.

Unfortunately history DOES repeat itself but I hope we can learn from history and prevent the turmoil from occurring again.

The message is simple. Raising capital will be much more difficult now.

You should lower your “burn rate” to raise at least 3-6 months or more of funding via cost reductions, even if it means staff reductions and reduced marketing and G&A expenses. This is the equivalent to “raising an internal round” through cost reductions to buy you more time until you need to raise money again; hopefully when fund raising is more feasible. Letting go of staff is hard and often gut wrenching. A re-evaluation of timelines and re-focus on milestones with the eye of doing more with less will allow you to live many more days, and the name of the game in this environment in some
respects is survival–survival until conditions change.

If you are in a funding cycle, you should raise your funding as soon as possible and raise as much as possible but face the fact that if you can’t raise money now you must cut costs.

While I do not own a large percentage of your company I hope you will consider this thoughtful advice.

I was here in 2000 and want to share what I learned through many years of experience and historical “pattern recognition”!

Here are the two emails from the year 2000 that I referred to above and all the statements apply in today’s market:

To: Angel Investors, L.P. Portfolio CEOs
Date: 04/17/2000 05:24 PM
From: Ron Conway
RE: Market Conditions Effect on Angel Investors, L.P. Portfolio
Companies

The down draft in the stock market sends us some obvious “signals” and we can’t help but mention them.

1. If you are in a funding cycle, you should raise your funding as soon as possible and raise as much as possible.

2. Many companies are ignoring certain VC leads we’ve provided in order to concentrate on the top tier only. While we have preached that in the past, this is no longer the case. Currently, top-tier VC
bandwidth constraints, coupled with the market down draft, make it very important to take meetings with any VCs where you can get their attention. We have been working hard to open up this new bandwidth.

3. You must aggressively examine and pursue M&A opportunities (unless you have over 12 months of cash reserves!) ro insure you have critical mass (including funding, customers, rolodex power, market
share, cash, synergy, etc.).

4. Be realistic on valuations - they will fall so be ready and willing to co-operate.

5. Look for corporate partners to invest so you can raise more money. You should also consider a sale of your company to your corporate partners.

6. If you are entering a funding cycle start raising money sooner rather than later.

7. While it’s safe to say entrepreneurs have had negotiating leverage with the “down draft” in the market, the VC community will start exercising their leverage.
—————————————————————————-
—————————————-

To: Angel Investors, L.P. Portfolio CEOs
Date: 05/10/2000 05:23 PM
From: Ron Conway
RE: Market Conditions Effect on Angel Investors, L.P. Portfolio
Companies

I want to “touch base” again; given the continued uncertainty in the capital markets.

As the market turmoil continues, we must underscore the advice that we have provided since mid April and it boils down to just a few points:

1) The capital market window is shut, including IPOs and VC Funding (VCs are looking at their existing portfolio funding needs - not new opportunities). Basically the market is now looking for PtoP (Path to Profitability) instead of BtoC, BtoB, etc! PtoE will prevail price to sales ratios! You must lower your “burn rate” to raise at least 3-6 months more of funding via cost reductions, even if it means selective staff reductions and reduced marketing and G&A expenses. This is the equivalent to ‘raising
an internal round” through cost reductions to buy you more time until you need to raise money again; hopefully when fund raising is more feasible.

2) If you have $10M or less in the bank you must do #1 above plus look at M&A options for your company; especially if your company is BtoC, content, advertising model, community, commerce, and even BtoB. An M&A transaction will allow you to gain critical mass and to get two sets of funding sources and rolodexes working on your behalf. M&A transactions take over 90 days so you need at least that much cash to fund your company. You must attend our M&A day on May 24th at the San Mateo Marriott at 3:00 PM. We will have investment banks there in addition to entrepreneurs who have
successfully accomplished M&A transactions. We will send you details.

We are still developing many new funding sources for our portfolio companies that are in funding cycle.

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A “busman’s holiday” is a holiday or vacation during which you do the same thing that you do for your usual work.

—Wikitionary

Source: Signal vs. Noise
Original Article: http://www.37signals.com/svn/posts/1286-a-busmans-holiday-is-a-holiday-or-vacation

Naughty America, a porn production company based out of Southern California, is building an Adobe Air-based storefront called Naughty America Direct that is basically an iTunes for porn. The app includes full-length DRM-free scenes for $1.99 each that are available in formats compatible with the iPod and iPhone, and requires no subscription. To grab an invite to the app’s ongoing private beta, go here and enter the code “techcrunch”. As if there was any doubt, this is all NSFW.

Users of Apple’s iTunes store will be right at home with Naughty America Direct. Featured movies are shown as thumbnails on the front page, and users can navigate with a sidebar on the left side of the screen to access clips by their favorite performers or from their favorite website. Content is drawn from Naughty America’s collection of footage across sites like “Naughty Bookworms”, “Diary of a Nanny”, and “Seduced by a Cougar”.

Naughty America Express doesn’t have the recurring fees of a subscription, and while it may cost a couple of dollars, it isn’t riddled with the advertisements and popups that plague free sites (or so I’m told).

Because the app is built on Air, it will work on both Windows and Mac. Naughty America also notes that this is one of (if not the first) applications on Adobe’s Air platform that allows of secure credit card transactions. For an alternative method of getting your porn fix, check out Heatseek, a porn-centric browser which we covered back in 2006.

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Gasman has created Antisocial, a very enjoyable demo of Canvas doing fake 3d and 2d along with that ZX Spectrum sound that you loved as a kid.

Check out the tool to see where the magic happens, and make some music, Spectrum style!

I feel like we have been light on showcases recently, so please email us if you have seen a cool use of Ajax that we haven’t picked up on!

Source: Ajaxian » Front Page
Original Article: http://feeds.feedburner.com/~r/ajaxian/~3/415200452/antisocial

The advertisement on Google, which pops up on a search for “Goog” (Google’s Nasdaq symbol): “Before you jump out of that window, why not spend your last remaining dollars at Woot?” An alternative version: “Losing your House? Without that mortgage to pay, now you can buy more of our junk!”

Offensive, or offensively funny? It probably depends on whether you are one of the people who’ve lost it all on Google’s stock recently. And really it doesn’t matter, because it’s going to send a lot of people to Woot’s popular ecommerce site, which lists a different item every day at a discounted price. And when they run out of that item, you have to wait until the next day for something new.

Thanks to SlackerAtWork for the tip.

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Sazell, the startup that launched last July with widgets that let you “snap the web”, has launched a new version of its site that includes a badly needed new logo and UI overhaul - the previous iteration was a bad rip-off of Google’s logo, and looked as if it would have been outdated in 2003. The site is still in private beta, but you can try it out by going here and entering the code “techcrunch”.

Along with the new UI, Sazell has introduced a number of significant improvements to its widgets. Sazell allows users to use a Google Toolbar plugin or bookmarklet to select a portion of a website (including images) for embedding on blogs and sharing with friends. When they were first introduced, they were totally static - they were little more than embellished links without any interactivity. The new widgets include functionality that allow users to leave comments, vote on polls, and post to social networks like Facebook. Sazell is also introducing a new feature called “AutoSnap” that lets publishers include a single snippet of code in their webpages that will automatically generate a Sazell widget for each new post.

Other sites in the web clipping space include Diigo and SimplyBox, which we covered earlier this week.

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We’ve had serious legal threats five times in the past, from YouTube, Marvel, Rivals, Mediascrape and my personal favorite, Richard Figueroa. None of those threats went to court because all of them were absurd, and we don’t back down under any circumstances (unless we’re in the wrong, which we never were).

But today, based on the calls I’ve received from CNET and the San Jose Mercury News, we’ve actually been sued. Earthcomber, the holder of a very shaky mobile patent, first sued Loopt last week, and yesterday added us in an amended complaint. They didn’t even bother with making nasty threats before they filed the complaint. They just sent it into the court and started making calls to the press.

I called Earthcomber President Jim Brady this morning to verify the lawsuit. At first he wouldn’t answer - all he did was try to explain how he’s been wronged by Loopt. When pressed he did confirm that the lawsuit was filed, but quickly added that he didn’t really mean to press it with us. He wants to go to court with Loopt, but is willing to quickly work something out with us to make this go away, he told me, hinting that he’d like to partner with us. He also said he’s been desperately trying to get me on the phone but hasn’t been able to, so he decided to sue us instead.

The problem with using a lawsuit as a negotiating tactic is that you can’t put the cat back in the bag. The door is open, and it has to play out. In other words, suing someone to get them to return your calls is not exactly a sign of brilliance.

I’m not going to go into a lot of detail on the specifics of the patent claims, other than that they are absurd, since our lawyers have asked me not to. But I will say this - adding TechCrunch to a lawsuit based on the fact that we are a search filter (see image to left) in a product seems a little absurd to me. I’ve asked our attorneys to spend whatever it takes to kill this lawsuit, and to find a way to counter sue this guy into the stone age.

Did Earthcomber also sue iMeem, RockTheVote and NRDC, the other filtered search options? No. Because that doesn’t get them all this free press.

We will not be bullied, and people who file frivolous lawsuits need to be put down. I would rather run TechCrunch into the ground and go out of business than let this guy win.

TechCrunch Lawsuit - Get more Business Documents

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Our co-editor Erick Schonfeld had the chance yesterday to discuss the significance of MySpace Music and free, ad-supported music in general on WYNC’s Soundcheck, a program produced daily by New York Public Radio.

He was joined by Farhad Manjoo, a columnist for Slate, who took issue in particular with MySpace Music’s user interface. Erick argued that, regardless of its execution, the service represents a step in the right direction and marks an important shift toward ad-supported streaming. The music industries are watching this experiment, and if it turns out well, they will likely extend the free streaming model to other services.

Erick elaborates on how music is information and, as such, wants to be free. But that doesn’t mean there won’t be other ways to make money on it. The music streams may turn into marketing for digital downloads and higher-margin goods such as ringtones, concert tickets, T-shirts, and more. In the end, Manjoo pretty much agreed with Erick’s sentiments.

Listen below.

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Want to follow every Tweet, blog post, YouTube video and Flickr photo put out by the Obama or McCain camps? Now you can follow the campaigns in a handy Dipity Election Center timeline. Using its latest Dipity 2.0 timeline mashup, the Election Center places each entry on a timeline that you can scroll through. Click on an entry, and a box opens to show you more detailed information. You can also leave a comment.

Each timeline can be embedded as a widget anywhere on the Web. And you can see everyone’s comments from any widget. The idea is that Obama supporters will put the Obama widget on their MySpace page or blog and that McCain supporters will do the same on theirs. I’ve embedded both widgets below. You can see by the larger number of entries for the Obama campaign that it is making better use of social media to get its message out. (At least that was the case when I looked at the timelines—see screenshot).

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