According to TechCrunch, Facebook may have to raise even more money to support its rapid growth.
Strong growth is always a nice problem to have but growth also comes with costs: facilities, staff, utilities, etc. Facebook’s problem - if you want to call it a problem - is it’s aggressively building an operating structure to support growth but it’s still waiting for revenue to gain more traction.
For anyone who thought Facebook was losing momentum, I went to a new media conference in Montreal earlier this week where I did an informal audience poll about what social media tools people were using.
A handful of people had blogs and a couple used Twitter, while the vast majority had Facebook accounts. This was not a tech/geek audience, which suggests that while the geeks are busy looking for the next toy (e.g. Twitter), mainstream users are still climbing on the Facebook bandwagon.
For more insight, Traffick has a good post looking at Facebook’s different revenue options, including premium services.
Google’s pushing hard within the blogosphere with Blogger, Google Blog Search and Google Reader. But what about the idea of a blog publishing tool - aka the GWriter?
It would be a standalone tool that bloggers could configure to use with Blogger, Wordpress, TypePad, et al. It would feature access to related services such as search, image search, blog search, Picasa and Google Docs.
If Microsoft can offer Live Writer, you figure some brainiac within the GooglePlex could create a different/better mouse trap?
Alek Krstajic wants to rock Canada’s wireless landscape.
As the new CEO of BMV Holdings, he’s planning on introducing a $40/month flat-rate, no-frills, unlimited talk, unlimited text service next year. And he sees no reason why BMV won’t be wildly successful despite the fact the three major incumbents, Rogers, Bell and Telus, will make his and BMV’s life as miserable as possible.
With Krstajic’s appointment as BMV’s CEO unveiled earlier today, I managed to get him to answer a few questions about BMV and the wireless market.
Who are the people behind BMV?
The original five are Columbia Capital (Washington) M-C Venture in Boston, Charles Road Ventures, Roh Partners from New York, and Ignition. A the new [wireless] entrants called me but when I spent time with these guys, I learned that Columbia and M-C have made startup investment in Nextel, Metro PCS, Leap and Mobile PCS. They have more been there done that in the no-frills market than anyone. Ignition’s Steve Hooper is the ex-president with McCaw Cellular and AT&T Wireless.
So, what’s story of BMV. How did it only spend $53-million wireless spectrum?
The story is here is not Alek is so smart but Alek joined a bunch of really smart guys who did something that is brilliant. How is it possible to pay so little for something so good. G Band is part of the PCS band, not the AWS band. The mistake everyone made was Industry Canada threw it into the AWS auction. Some of the wireless players made calls to big handset manufacturers about whether the G band was useful. They said “no, this is stump spectrum for backhaul or microwaves”. Harry Hopper with Columbia did some research and realized all of the base stations see the AWS spectrum. The next thing they did was see who owned G band in the u.s. The entire G band in the U.S. is owned by Sprint, which traded 800 megahertz spectrum with the U.S. for G Band spectrum. Sprint wouldn’t give up 800 megahertz spectrum if it didn’t think the G Band was useful.
It looks like you’ll be operating a CDMA network before upgrading to LTE. Doesn’t that limit handset choice and make BMV less attractive?
I will buy three of 10 handsets [available] but my plan is not go up market. I don’t care about cameras or Web browsers. I’m more into the low end: $40 unlimited calling, unlimited text. We are trying to be the antithesis of what the inumbents are. The incumbents have unlimited but, which I call the Unlimited But plan. We have no system fees; the price is the price. From all my years with Rogers@home and Bell, I am an expert in customer irritants, and this my chance to build a brand from a concept that people buy from people they like and trust. We will have a brand that is friendly and easy to do business with.”
Is there room for more wireless players in Canada given how Bell, Telus and Rogers dominant the market?
We will not be the big dog but the dog you will not mess with because our cost structure is so low. The worse thing the incumbents can do is preempt our pricing by matching it. I’ll tell them no matter how low you go, you will lose more money and I will only be making less.
Canada’s comfortable - and profitable - wireless oligopoly (Rogers, Bell and Telus) could - and I stress could - be in a rude awakening when several new rivals enter the fray over the next couple of years.
The newest player is BMV Holdings, which jumped into the spotlight today by announcing the hiring of ex-Rogers and ex-Bell executive Alek Krstajic as its CEO. BMV spent a modest $53-million during the spectrum auction but didn’t appear on the radar of analysts or the media because it focused on G Band, which was not seen as particularly prime or useful wireless real estate.
BMV, however, believes it can launch a CDMA network offering flat rating pricing plans with unlimited talk and text services. BMV plans to get going using technology from Qualcomm and Nortel before migrating to LTE in a few years.
Krstajic is no stranger to the low-cost wireless world. After leaving Rogers in 2003, he joined BCE as chief marketing officer before becoming CEO of Bell Mobility in 2006. At Bell, he helped create a new business called Bell Vanguard Inc. that was going to roll out a low-cost wireless service in Canada. Bell Vanguard has funky office space downtown, a large staff and TV commercials ready to roll when BCE abruptly cancelled the project. (More details can be found here.)
BMV’s investors include Columbus Capital, M/C Partners, Charles River Ventures and Rho Ventures.
The big challenge facing BMV and the other new wireless entrants is whether they can establish a viable foothold amid the Big Three. Canada’s “fourth” wireless carrier, Fido, struggled to compete even though its no-cost service was popular, especially with younger consumers. Fido (aka Microcell) filed twice for bankruptcy protection before it was acquired by Rogers.
BMV is betting that not blowing its brains out on spectrum purchases will give it more financial wiggle room to build the network and attract customers. As well, it must be confident that consumers want simple plans, and that it can go head-to-head against players such as Solo (Bell), Fido (Rogers) and Virgin Canada.
As the economic turbulence hits home and people start to pay more attention to their finances, it will be interesting to see if iPhone sales remain unscathed.
My take is that growth may not be as spectacular but strong demand for the iconic device will keep sales robust even as people shy away from other purchases such as clothes, restaurants and other kinds of consumer electronics.
From what I can tell, the iPhone’s biggest strength is its utility. It’s seen as much more than an MP3 player or a phone. For many people, it’s the ultimate portable computer that you can mold into anything you want with the growing number of applications within Apple’s App Store.
Of course, most people probably don’t use the iPhone to do anything other than listen to music and talk to friends but the idea of being able to do other things if they wanted is compelling.
As well, the iPhone -and, for that matter, cell phones - are now seen as personal and business necessities. The monthly bill is just the cost of being able to navigate daily life in an easier way. This means that when the vast majority of people receive their bills, there’s no sticker-shock if it’s really high; just the realization that they’re using this utility a lot.
Combining the iPhone’s allure and the need for mobile device is a powerful one-two punch that few consumers are avoid. And with talk about a $99 iPhone, you have to believe consumers are going to find it difficult to resist even if times get more difficult.
The only bump on the horizon could be data costs. With carriers such as Rogers and AT&T looking to get as much as they can from subscribers, it will be interesting to see if they can resist boosting data prices on the assumption that iPhone users will happily pay for the convenience.
More: In the third-quarter, Rogers sold 255,000 iPhones. It will be interesting to see how sales fare going forward given that initial sales were buoyed by pent-up demand and a short-lived data plan that offered 6GB for $30/month.
More: Jim Courtney (writing on GigaOm) suggests the Blackberry Storm is an iPhone and G-1 killer. He suggests the Storm be called the “Blackberry Stealth” because of the lack of media coverage it has received even though he believes it will “major major market penetration” later this year.
As a native Canadian, Howard Lindzon comes across in some respects as, well, un-Canadian…but I mean that in a good way. Unlike the typical meek Canadian demeanor, Howard is brash, confident, opinionated and, as important, not afraid to invest in startups with good ideas.
If we could figure out a way to repatriate him, Canada’s startup and venture capital communities would be a lot better off and a lot more interesting.
Last week, Lindzon unveiled his latest investment, Toronto-based ECHOage, which runs an online children’s invitation service. The premise is pretty simple: rather than having a guest bring a birthday gift, they contribute money online, which is divided between “one meaningful” gift and a charity. It’s the digital offshoot of a birthday idea in which a child brings two loonies to a party - one for a gift and one for charity.
With a lot of the go, I managed to get Howard on the phone last week to ask a few questions.
How did your investment in ECHOage come about?
HL: I was shown by idea, and introduced to [ECHOage co-founder] Alison Smith. I wanted to see if they could prove it out a little bit, it was pre-party. They came back a couple months later with some money raised, and 300 to 400 parties they had thrown - all viral through the Web site. That is when I decided they were on to something – a micro-giving idea for birthday parties.
It resonated with me because I’ve been looking at female-owned and operated businesses on the Web. Women surf the Web so differently than men do. It is the same Web but females and males have completely different surfing behavior. I have been looking to back some female entrepreneurs so this idea seemed simple enough to expand, and it already had some success. I tend not to worry about ideas that can be duplicated as long as they are executing on their plan, and building their brand. It was a real simple business, and we have some ideas to be launched on micro-giving and social network.
The startup investment is volatile these days, isn’t it?
HL: The Sequoia letter, the stock smarket are real events. You can ignore it or try to understand what the new landscape will be like. One advantage is low valuations but at the same time you have to balance low valuations with making sure your CEO has enough skin in the game and motivated in tough times. I think people are acting panicked. I am now saying it is not called for; a lot of people have lost 30% to 40%. That said, there is a lot of deflation in business with laptops, wireless and you don’t need office space. But when you tap into peoples’ nest eggs, it makes for a different world. I am being more careful; not because I like being careful but I don’t want to be the only dumb guy saying things are great.
Have you talked to companies in your portfolio?
HL: I have done that round of calls asking what can I do. I have spread myself pretty thin because I like making a lot of investments. That’s why I gave up stock traing for the headache of sitting in front of a screen. I recently launched a new startup – StockTwits. We just did a small round, and I am 24 hours a day on that. I like to diversify my own things, between running a company, helping with PR and marketing at other companies, adding capital into rounds that want marketing experience, and running my hedge fund.
Talk about Stocktwits. What’s going on there?
StockTwits has had a great reception. We built it on top of Twitter. We can say that is good or bad but I feel like it is all about building a reputation platform because stock message boards that are just broke: all noise, no signal. I am all or saying what you want but let everyone see exactly what you said all the time. People can filter out your noise. I can pick and follow who I want to choose based on your reputation.
I think it is the best idea I’ve ever had. I am really excited. We had 3000 Twitter users the first couple of days, and they all are contributing. We are not supporting bulletin board stocks so you’ve got 7,000 real traded securities so it keeps away the penny stock people.
What’s the business model?
There’s a premium service that we are developing and a tipjoy service where you can give ot people with good ideas. The idea is just find new talent and help it rise to the top – it’s Digg using Twitter with some editors – a group of 10 of us looking for new talent. It is really open Street.com. StockTwits is that everyone sees the news so let’s create something that is what is everyone saying about the news. This is a Twitter-ized Digg version; If it really grows, it is really the Facebook for finance. In two clicks, you can get to someone’s profile, and see who he is. If I like Fred Wilson, I can click on some of the 50 people on his front page.
Here’s a video in which Howard talks about StockTwits:
There seems to be an awful lot of excitement these days about NetBooks - small (miniaturized?) notebook computers that provide users with enough power and features to surf the Web, check e-mail, do word processing, edit photos, etc.
I’m personally not in the market for a new laptop but if a computer maker was looking to seize a market niche, it would be interesting to see someone create a BlogBook - a notebook designed and aimed at bloggers.
It would come with Firefox pre-installed with some cool plugins (e.g. Zemanta), a blog publishing tool (Microsoft Live Writer), a user-friendly photo-editing tool, a publishing tool such as Digsby, perhaps a FTP client, and a 30-day free account for Boingo.
The BlogBook would be the perfect computing companion for people who wants a lightweight, powerful machine to blog/do social media on the go.
So, what do you think? Would there be enough of a market to make a BlogBook viable?
Update:Walter Mossberg has a story on how the NetBook is coming into its own. Maybe some smart NetBook maker will let people order customized versions to meet their needs be it blogging, Web surfing, e-mail, photography, travel. David Zatz has jumped on the NetBook bandwagon by buying a My Wind that will serve two purposes: a mobile blogging platform and portable video player.
It’s not every day that you get to sit down and talk to a rock star when you write about technology and work for an online travel planning site.
So, I’m really excited about doing a “fireside chat” with David Usher in Montreal this Wednesday at an Infopresse conference. David and I are going to talk about how he’s using technology and the Web to create, market, distribute and sell his music.
I met David during the mesh conference last year where he provided excellent insight from an artist’s perspective about the music industry and the Web. What was really terrific was that David spent a lot of time at mesh, attending sessions, talking with people, and getting even more ideas on how he can use the Web in new and different ways.
With the “r” word (recession) slowly going from a whisper to a quiet roar, the spending habits of consumers are going to quickly change.
If people are going to make purchases, many of them will be bargain-hunting - waiting for increasingly anxious retailers to have sales, or live without something new until they can afford it or their existing computer, jeans, car, etc. no longer works.
Amid this consumer landscape sits Craigslist, which has supplanted eBay as the leading place online to find bargains. If consumers are going to be penny-pinching, Craigslist will be the place to do it. On Craigslist, the bargain is still very much alive and well if you’re willing to do a little work such as picking up your purchase as opposed to have it mailed to you.
For example, hockey equipment - a particular interest of mine - can be purchase for 75% below retail prices. For the most part, it’s relatively new equipment purchased by people who thought they were going to be playing but can’t anymore, or people who just want to sell extra equipment.
If the recession takes hold and the consumer orgy that has thrived for the past decade comes to an abrupt end, Craiglist is poised to thrive. You’ll have motivated buyers looking to save cash, and motivated sellers looking to “monetize” stuff they no longer want/need.
More: Other online companies that could benefit from the recession are:
- Kijiji, whose growth seems to have plateaued in the U.S.; Priceline, Hotwire.com, Skype and Paypal.com. It is interesting that Kijiji, Skype and Paypal are owned by eBay so perhaps this post should have been eBay will thrive during a recession.
