Marksonland

Now, prior to this trip to Phoenix I had never heard of Jobing.com. Craigslist? Yes. Monster? Of course. Careebuilder? Obviously. Yahoo Hot Jobs? Check. I've even heard of smaller sites like jobfox (they have a billboard on the 101). But never Jobing.com - and yet here they had naming rights for a prominent arena. In fact it was just last October that they shelled out the $30 million for the these rights.

OK, so was it money well spent? Am I just out of touch? Are they an uber-successful site that I just never heard of? Unfortunately for them, doesn't seem so. According to Alexa, their traffic rank is 4,787, well behind the competition. In fact, Alexa seems to show that their traffic is actually down since they spent all that money on naming rights.

Well, Alexa is notoriously unreliable anyway, right? The company must be doing well in Phoenix where the naming is heard/ seen most? They must have lots of job listings there? Actually, no. According to the site, they have about 1700 total listings in Phoenix. Pretty impressive until you count that Craig had over 1100 listings added to his site just today.

$30 million for those naming rights. Ugh.

What would I have done with that money instead? Well, come up with a better name for starters. There is a word "jobbing"but as you can see that has two b's. When i first saw the sign on the arena, I really wasn't sure whether it was pronounced jobbing or jo-bing. That's not good.

In my mind things like naming rights are great for brand maintenance or brand enhancement, but terrible for brand building. Quick way to test whether your web-site should buy naming rights: if you're tempted to include the .com part of your URL in the new name of the stadium, you're not ready. Everyone knows that there is only one domain that counts: .com. Successful brands (Yahoo, Google, ebay, etc.) online don't include the .com in their marketing because everyone knows where to find them.

If your inclination is to include the .com in the name, it means you don't have an established web brand and you're looking at the naming rights as a traffic buy. Naming rights are a really bad, expensive way to buy traffic. Instead, spend the $30 million somewhere else where you can actually get some real traffic for your money. If you do that and lots of other things really, really well and you eventually succeed in building a brand then, at that point, go ahead and name a stadium after your company. You've earned it.

But it's more than that. There are actually tangible assets that the very wealthy often times bring with them. Obviously, financial wherewithal is one. If your company runs into financial peril or just needs some money, there is no need to look to outside sources. The wealthy founder can personally make the necessary financial commitment. But it goes beyond just finances. Usually a very wealthy person's name is well known. This makes getting the much desired press/ media attention for your company's efforts much, much easier. Very wealthy people also often have a wide network of contacts, so introductions for purposes of deals, hiring, sales, etc. all come easier. All good and very valuable stuff.

So the answer is yes then? Well, maybe. I'm reminded of why it might not be always the best idea after reading a recent post on Valleywag. This particular entry was rebutting an ill-conceived post on Tech Crunch suggesting that the Huffington Post was gearing up for an IPO. The Valleywag piece, after explaining how that is not a likely scenario right now, added this little tid-bit at the end:

[Founder] Huffington is a successful writer and got a fat divorce settlement.... This is their pet project and I can't see them selling anytime soon. Huffington -- like Michael Moore -- has world-changing aspirations. With plenty of money in her pocketbook, she doesn't have to worry about cashing out.

In other words, even if the company was offered an amount that would be very interesting to employees, co-founder, investors, etc., they might not take it because the main founder isn't interested. This isn't the first time this scenario would have played out in the Valley. I know some folks who work for a company that was made a pretty sweet offer by Google pre-IPO (i.e. life changing money for the employees) and it was turned down by their uber-wealthy founder. That company is still floundering around today trying to find itself.

So why does this happen? Different agendas. Everyone wants challenges and the satisfaction of overcoming them. As people get more successful, the stakes raise. If an entrepreneur hit the equivalent of a 400 foot home run in his or her last company, very often they won't be satisfied with anything less than a 450 foot home run with their new company. In the meantime, investors, employees, etc. would be very happy just getting one over the wall.

So if your answer to my simple question was yes, you might be right. Just like anything else though, be careful what you wish for.

Rock and roll is a mature market. Bill Haley and the Comets was formed in 1952, and the market evolved from there. Was Bill Haley a great guitar player? Probably not. But it didn't matter. As an early entrant in the market, his popularity was the reward for being an innovator. Innovators have the hard job: they have to find the new, cool stuff the rest of us don't see. Technical proficiency is not their game, its vision and creativity. That's why folks like Bill Haley, Buddy Holly, Richie Havens, Chuck Berry, while not being the most technically proficient guitar players, are nonetheless rock and roll gods.

Fast forward some years and the market for rock and roll matures. Rock and roll becomes the main stream. Every person in America at one point or another in their life picks up a guitar or set of drum sticks and tries their hand at making music. In this mature market, the early adopter advantage is lost. Unlike in the early years, it's not completely new work that's being produced, it's iterative work. For iterative work to succeed, it must be at least as good as its predecessor in all technical respects. In other words, the maturing market sets at least a base level of proficiency required for success. If you can't play at that level, you won't succeed.

But technical proficiency is not enough either. There's a guitar player named Joe Satriani who most guitar players will tell you is the most technically proficient guitar player out there. Unfortunately for Joe, he and I share one thing in common: the same number of top10 records. In other word, technical proficiency is required to be in the game, but standing alone it is not enough to win. No, to win at this point it's the rare combination of technical proficiency plus that "something else" that is the recipe for success.

OK, so there's a bunch of bands out there who have the requisite level of proficiency plus that "something else" which allows them to have a measure of success. How do you distinguish these guys (think Hootie) from the "great ones"? At this point I think it comes down to a strong brand. One distinguishing characteristic of a great brand is the ownership of a word. BMW = Driving. Google = Search. Marksonland = Insight (!) ;). To be great in business it means you need to have a great brand. The same goes for music. When I think Clapton, i think blues. Garcia: psychedelic. Page: rock and roll (both the song and the word). Hendrix: haze...well, whatever, you get the idea.

Anyway, I think this evolution of creativity to technical proficiency to brands follows any maturing market. My industry - the interwebs - is maturing rapidly. In 2006, if you are going to do anything on the web, there is a base level of technical proficiency that you must bring to the table. And given the early adopter advantage is well gone, if you don't have that, plus that "something else" - whatever that my be - you won't be successful over time.

A good example of this is in the blogosphere. Compare the A list bloggers of 2004 with those of today. Those who have dropped off the list over the past couple of years - well, they can enjoy knowing that they are the modern day equivalent of Bill Haley.

During the last bubble (er, excuse me, period of exuberant times), I was living in NY slaving away at a law firm. Meanwhile, based on all the news reports from the time, the magazines, heck, even the stories from lawyers in my firm's San Francisco office, it seemed like there was a launch party for a new web site being thrown practically every day. Lavish stuff. Great venues, good food, drinks flowing - and this was a regular thing.

Being no dummy, I decide I need in on this free shrimp action fascinating world of the internet and new media. So I quit my lawyer job, packed up my stuff up and moved out to California. What happens as soon as I get here? Of course, the downturn. The bubble bursts and not only am I not getting my share of free food and booze, but everyone is left pretty much on their own to slog it through the long hard winter.

But my point is that I did that. I stayed through the down turn. Now we're back riding high! So where are my free shrimp the launch parties?? There's nary a one in sight? Here I'm reading that the internet advertising market has surpassed $7b in the first half of 2007 alone. Hello?? Web 2.0 companies with ad supported business plans? Why aren't you launching in style??

Wait? Google accounts for 40% of that money? Wow. Your not getting in on this action? And you decided that those launch parties never actually did a good job of launching companies? So now your marketing budget now goes to SEO consultants and traffic buys (i.e. Google)? Well, that sucks.

So in other words it turns out that in this latest period of exuberance, there are launch parties happening every day around here. Unfortunately though, given the distribution of the online ad spend, they're all at the Google-plex. Sadly, once again, I'm not invited. No wonder there's so much free shrimp in that place.

This was a concept that we considered when launching Topix in January of 2004. To Rich's credit he realized early on that most folks would find Topix through any one of the literally thousands of "side doors" (e.g. www.topix.com/sf) rather than through the home page. It's also precisely the reason why we successfully punted on the issue of what the home page should be for three and a half years after launch.

I've written in the past how it might just be that SEO is bad for your brand (ok, probably not bad, but likely having very little positive impact). On the other hand though, SEO is clearly very good for Google's brand. People become trained to use things in a certain way. Most people have a handful of sites they bookmark or visit directly and the rest they find through Google. For every user that has your site in the latter category, bad news: for that user, you're brand is likely not being perceived at all. Rather, in that user's eyes, your site is but one of many sites, the only commonality of which is that Google got them there. That's right, for that user, you're non-distinguishable. In fact, the only brand that comes through in this scenario is Google's.

Seth calls this a new world where "bundling" is harder than ever. He gives several examples of bundling that, as he says, became so common we forget their bundling at all:

Bundle donations and parcel them out to charities that deserve them. (That's the United Way).

Bundle TV shows and present them, with ads, on your TV network.

Bundle the items in your industrial supplies catalog and hand it to the business buyer.

Bundle thirty businesses and house them in one big office tower.

What Seth calls bundling, I call economies of scale. Economies of scale are, in a nut shell, costs savings that are achieved over a large scale operation. Basically the marginal cost of production (i.e. the cost of producing one more widget) decreases as the size of the operation increases.

On the web though, for most sites, there are no economies of scale to be had through increased page production. This is because there is essentially zero cost to every new page published. Note, I say for most sites. Obviously for extremely large sites, there are significant cost savings that can be achieved by scaling. However, for the rest of us, adding a new page to a site costs nothing. This is precisely why search engine spammers/ ad-sense farms are succeeding (and why no one has done a successful web-property roll up?). Web pages solely designed to catch search engine referrals are produced for next to nothing. The only limitation is the imagination of the spammer.

So in this uber-competitive, strictly egalitarian online world, how do you build a brand? Is Marksonland really advocating that you don't SEO? Of course not. SEO means free traffic and that's hard silly to turn down. My point is that once you do receive your rightful share of SEO traffic, don't stop there. You're brand is not being built on these visits. It's unbundled.

Yes, I'm going all the way back to 2004 here. Google-airres had yet to be born (Google was still private), Yahoo was still relevant, Ask still had a butler doing its dirty work and Fox was known more for it's TV networks than its social networks. It was indeed a kinder, gentler time.

Anyway, there's a lot of differences between now and then, but one of the things I miss most about those simpler times is Silicon Beat. For those who don't remember, Silicon Beat was was the brainchild of Michael Bazeley and Matt Marshall, two technology/ business reporters for the San Jose Mercury News. As the Internet economy started re-heating up in 2004, these two reporters had a problem in that they were finding more interesting stories than would otherwise "fit" in the print edition of their paper. Rather than letting these stories die, they took advantage of the utterly revolutionary new technology of the time - blogging! - and created a home for them.

Silicon Beat was born and it took little time for it to become: (i) great; and (ii) influential; and (iii) a must-read for anyone in the industry. As Bazeley and Marshall were/ are professional reporters, they not only had the chops to sniff out the relevant stories, but also the objectivity and writing skills to make them interesting to the readers. When Topix annunced one its first major deals (with the NY Times), it wasn't the AP story that caught most in our industries attention (despite the fact that even Drudge linked ot that AP story), it was this entry that got our phone ringing.

Anyway, sadly, Silicon Beat shuttered itself in August 2006. Matt went on to create Venture Beat and Michael went to a new role within the Merc. I just can't help but thinking as a reader, how I miss the days when I could read about my industry from seasoned reporters like these guys.

I also can't help but wonder how the Merc let this happen. If I'm them, and I see my paper getting its butt kicked online, and two of my reporters have a pet project that seems to be on its way to becoming a runaway success, how/ why would I ever let them walk away from it? Why wouldn't I put more resources behind it and grow it out as big as possible. I still don't understand that. Oh well. I guess its like the old saying, the early bird gets the worm, but the second mouse gets the cheese.

When I practiced law, I represented several companies who did this. One company rolled up a bunch of radio stations. Another did a roll up of technical schools (a/k/a devry university, and it's ilk). Why do they do this? Well, they figured on the cost side of the balance sheet, just by virtue of having the many companies run out of a single back office, there were cost savings to be had. Also, the sum of the revenue from the various parts places the company in a better financial position, and therefore can get more favorable credit terms, better leveraged buying terms, etc.

On the revenue side of the balance sheet, capitalizing on synergies in sales and marketing efforts, not too mention brand growth, make it an attractive option. So could this be done on the web? Some folks are trying it.

The point of my last post was that unless you are an exceptionally large site (and i mean exceptionally), the cost of publishing is pretty cheap. So where are the cost savings to be had? While likely you could position a single ownership to get better credit terms, I'm not sure there would be real savings otherwise. The closest company I can think of to having a Web Roll up in practice is IAC. From what I know, each of their portfolio companies runs its own back-end/ cost centers. Same with most newspaper companies and their various properties. If there were significant savings to be had, wouldn't those be ideal candidates to implement them?

What about the revenue side? Well, on the web, traffic = revenue, so utilizing properties to cross purpose traffic seems like something a roll up would want to do. But, again, looking at IAC and the newspapers I see very little happening there. Granted there might be little synergy in the users of match.com and lendingtree (two IAC properties), but they do own a search engine. Wouldn't that be an ideal mechanism through which they could cross purpose traffic?

Also, selling ads is a tough business. The world seems to be divided between premium ads (usually sold by the individual properties) and remnant inventory (usually taken care of by a network). The former get premium CPM's, the latter, well, not so much. So, if you wanted synergy on the sales cycle, what you really want is to create a "mini-network" comprised of your own individual properties where you can place premium ads. But selling premium for a single site (with individual demo's) is a tough sell on its own. Can this be done over a mini-network? If not, aren't you better off just creating another remnant network and cranking of page views across a bigger network?

Anyway, there's probably a lot of folks smarter than me who can figure out how to squeeze nickels out of a web-roll up. Right now, I can't see it happening.

I figured out that this chronic condition exists precisely because it happens to be true: every start-up is on the verge of huge success or a huge collapse. That's the nature of the beast. Here's an example: your competitor just got funded. As a result of this, are you now doomed for failure or poised better than ever for greatness? Two good articles examine both sides of this question. The first tells you why this is good news for your company. The second, why it is bad news.

The thing is that they're both 100% correct. Just like its not paranoia if people actually are out to get you, it's not schizophrenia if really do live in a crazy world.

With Web 2.0, you can take an IFrame and seven callbacks and call it a platform.

In a conversation in the past week or two, I was actually making this exact same point about the term platform. It's officially reached buzzword status. Like any good buzzword, it now has zero meaning.