Amazon Acquires Kiva…

If you run an eCommerce business you should be concerned. As if competing with Amazon wasn’t hard enough, yesterday, they acquired Kiva Systems for $775M in cash. Kiva is a robotics company that makes the formerly labor intensive process of order fulfillment faster and more accurate. This allows for ecommerce distribution centers (DC) to operate at a higher capacity with fewer people working at the DCs. So they decrease operating and capital expenditures.

Amazon is already the lowest cost provider of almost every product on the Internet. I buy my Apple products from Amazon because it’s cheaper than buying direct from Apple. If Amazon refuse to sell new Kiva systems, they will have a distinct advantage over all other ecommerce companies. They will be able to operate at a lower cost structure given their scale and technology, furthering widening the pricing gap. At the very least, Amazon’s DCs will be the standard at which the industry operates. In order to compete with Amazon, you will need to buy Kiva systems from Amazon. The installation of Kiva systems will reveal valuable information.

Pretty soon, Amazon will become THE destination for purchasing anything on the Internet. Whereas, before a customer would most likely come from Google or a vertical publisher, more and more customers are going direct because of Amazon’s low cost brand. This is a scary reality for a lot of companies, but so far, a great consumer experience.

Why the Self-Driving Car May Change Everything

For those you who don’t know, Google is working on a self-driving car. It might seem like mainstream adoption is a ways away, but the first state, Nevada, has already approved regulations for it to hit the road there.

So obviously this technology is magic, but I don’t think people understand how important this will be. The most valuable resource that we have is time and our ability to mine pockets of human time or attention has diminished to a phenomenon called “peak attention”. The self-driving car is the first technology that creates more pockets of time since the PC.

WHAT? Ok let me explain…

In 1600’s, we saw the creation of the first corporation called the East India Company. The EIC was the most influential, and possibly the most powerful corporation in the history of man. To expand and prove such a loaded claim would take too long but a great reference is Venkatesh Rao’s a History of  the Corporation. In fact, I am mostly summarizing his post here for the purposes of framing it for the context of the self-driving car.

The EIC’s reign coincided with the golden age for the British Empire. Most of the wealth generated was from exploitive trade, a zero sum game. The invention of the steam engine, and the industrial revolution changed that. It moved humans at the speed of technology instead of moving technology at the speed of humans. Steam power used the coal trust fund (and later, oil) to fundamentally speed up human events and decouple them from the constraints of limited forms of energy such as wind or human muscles. This manifested itself in the creation of steam ships, cars and planes.

Leveraging natural resources to create energy created a new wealth creation vehicle, human time. When we could “do more, faster,” we had time to come up with even more innovative ideas. Energy and ideas turned into products and services could be used to buy time. For example, take an average housewife, the target of much time mining early in the 20th century. It was clear where her attention was directed. Laundry, cooking, walking to the well for water, cleaning, were all obvious attention sinks. Washing machines, kitchen appliances, plumbing and vacuum cleaners helped free up a lot of that attention, which was then immediately directed (as corporate-captive attention) to magazines and television.

For two centuries, we burned coal and oil without a thought. Then suddenly, around 1980, Peak Oil seemed to loom menacingly closer. For the same two centuries it seemed like time/attention reserves could be endlessly mined. New pockets of attention could always be discovered, colonized and turned into wealth. Then the Internet happened, and we discovered the ability to mine time as fast as it could be discovered in hidden pockets of attention. And we discovered limits. Suddenly a new peak started to loom: Peak Attention.

This takes us to today. All products are competing with each other for attention. Platforms that aggregate vast amounts of human time become even more valuable. This is why the Google self-driving car is so important. The average American spends over 100 hours a year commuting. There are over 300M Americans so that’s 30B hours. Of course not all of them can afford the car but it illustrates the scale of time mining potential.

Some questions to consider if this is the future:

What industries will this disrupt? (taxi’s, Uber)

Will people own less cars or more? (I think less)

Will there be less traffic or more? (I think less)

What augmented reality experiences will consumer want in their car?

How does this position Google?

Online Wedding Advertising Needs to Change

The mid 1990’s marked an unprecedented adoption of a new media platform called the Internet. Prior to this new technology platform, content creators and distributors dictated what consumer watched, or listened to, via the Radio and Television. The Internet allowed people to access information and entertainment at will. The Internet grew faster than any other media platform before it and businesses rushed to reach audiences online.

The first widely accepted advertising unit on the Internet was the banner ad. Businesses paid for these ads in 3 ways:

  • Pay to be listed for a set period of time
  • Pay by the number of visitors who saw your ad (commonly known as CPM)
  • Pay for the number of people who clicked on your ad (CPC or Cost per Click) 

The more accountable the website or publisher had to be, typically, the better it was for the advertiser. Why?

Let’s say I run a business that is advertising on a website that you operate. My goal is to get a targeted group of potential customers to contact my business. If all I paid you for was to be listed, you probably wouldn’t be very motivated to make sure a large number of people or my target audience sees my ad, never mind clicks on it. If instead, I paid by the number of visitors (impressions), you would only be motivated to make sure an audience sees my ad, but targeting would not be your concern. Cost per click was considered the “performance ad” because as a publisher, you would be motivated to get a lot of visitors who were interested in seeing my ad, not only view it, but to also click on it. Google is the largest cost-per-click (CPC) ad network.

 So what does this have to do with the wedding market?

The rest of the Internet has moved on to some more advanced advertising products that require the publisher to be even more accountable for generating high quality traffic. Travel, auto, and insurance industries are going beyond CPC to pay per lead, to even pay per booking or purchase. Amazon gets publishers to send them traffic and pays them only when the visitors buy something from Amazon.com.

Wedding ad products are going backwards. Instead of having more accountability, publishers are having less. There are web properties that ask advertisers to pay for “sponsorships” which means paying a flat fee. Publishers with this ad model don’t have to worry about how many customers contact the businesses.

The largest wedding websites are basically giant online directories. Their advertising models for small businesses (which is the vast majority of the wedding market) are pay to be listed, or pay for premium listing positions. The advertisers who can afford it (i.e. Macy’s, Crate & Barrel, Williams-Sonoma) are only slightly luckier- they get to pay per ad impression. These business models are not only considered imperfect for the advertisers, but it also hurts the consumer experience. The website are incentivized to send brides through as many pages as possible to increase their revenues and stats. What both brides and businesses really want is for brides to quickly find the right vendor for them.

This is an especially worrisome issue in the wedding market because roughly 80% of all leads vendors receive are automatically disqualified because the date, price, package information, etc. don’t match up.  The remaining 20% are not guaranteed to book but those are the only ones that have the potential of booking. That’s a tremendous waste of time and resources for brides and vendors.

Wedding vendors don’t want more leads, nor do they want complicated advertising options where they have to pay thousands of dollars up front just to be listed. Only at the end of the year can they figure out if it was worth it. They just want more business. The wedding industry is estimated to be an $60B - $80B market, it is shocking that its ad business is so far behind. 

That’s why we created Daily Aisle. Starting with reception and ceremony venues, wedding vendors will only pay us for the leads that book. It’s time for an easier advertising model and we are here to deliver.

Building a Startup Is Still Hard

Never Change by Jay-Z on Grooveshark

It was supposed to be easy. I keep hearing and reading that Amazon and Rackspace were making it easier and cheaper to build web apps. Social platforms like Twitter and Facebook make it easier to acquire customers. Angels and VCs are throwing money at seed stage companies.

That’s all true. But unfortunately, it’s not easy.

My co-founder, Kim Dowd, and I had a good laugh yesterday reading Michael Arrington’s new blog UnCrunched

We’ve recently had a tough couple of weeks. During a server migration, our dev accidentally deleted our bridal dashboard, which set us back a couple of days. We also decided to switch to a new CSS/HTML toolkit from Twitter called Bootstrap. It made our site look better, and it should save us time in the future, but it set us back a week because we had to backward integrate our existing pages.

Personally, I feel a bit demoralized. I find it entertaining observing other startup founders. We all ask each other how everything is going and we all answer “GREAT” and then like a PR firm, we spew the latest good news spin. I then go grab drinks with a few close founder friends and we order stiff drinks, stare off like zombies, and talk about all the things going wrong with our companies:

"I yelled at my co-founders and called them all idiots yesterday. I think they are still mad at me."

"I can’t close. XYZ VC won’t invest unless we have a lead and our lead wants to give us super pro rata rights."

"No one likes our CEO."

"My co-founder won’t talk to me."

"I have no idea how we are going to make money."

"My co-founder went home with the guy I brought out to the bars… WTF!"

Those are all real quotes from founders I know, whose companies are perceived by the tech press to be doing well. That’s why reading Arrington’s post was so comforting.

We thought this was written by someone at 500 Startups this year:

Well the kids went out to get drunk, or rather, more drunk. I think they might have actually gone out to a strip club again. How classy is that?

Oh good, the kids are back, and they are well hammered. None of them can walk properly, and they keep bumping into the cubicle walls and making everything on my desk shake. Since I’m not drunk, the impedance mismatch makes it impossible for me to carry on a conversation with them, so I’m just trying to block them out. But now they’re all playing networked DOOM at top volume, so in order to concentrate, I have to wear headphones with music on at top volume, and even that doesn’t quite work. Since, as I mentioned, they keep making the mistake of trying to walk, and they’re making all the shit on my desk bounce around.

It’s a saturday night, and I’m in my cubicle surrounded by a bunch of drunken farmboys from Illinois who haven’t been more than two miles from our office in scenic downtown Mountain View in four months.

My ears are going to be ringing after this. Fuck it, I’m going home. (Check that — my ears are ringing.)

But this was written in 1994 by a Netscape employee. It’s kind of funny to think that someone as brilliant as Jamie Zawinski had similar experiences to ours but only 17 years earlier.

The past 2 months have been pretty difficult for me. We were close to raising $1M twice but couldn’t quite cross the finish line. We decided to put off fundraising until after our product launches. The product has taken longer than expected and feel helpless, watching my cofounders kick-ass, and wishing I had learned to code (we are launching the private beta sometime this week!).

My relationship is on the rocks. She’s in Boston and I’m in SF, and we’ve been doing long distance for as long as we’ve been dating in person. I didn’t mail her anything for her birthday and she’s pissed. We both want her to move here but she won’t move here without a ring. I can’t blame her. Her entire life is there and moving for someone is risky.

The problem is I can’t afford a ring, and I wonder if I’m mature enough to take care of someone else. I can barely take care of myself, eating 1.5 meals a day. I’ve taken up the same time sleep schedule as the engineers, waking up at noon… on a good day. 

Why am I telling you all of this? Because I don’t want to be another startup founder that tells you that everything is going great. We are funded by 500 Startups and most recently participated in Lightspeed Venture Partner’s prestigious summer program. Things are still hard. My professional life is hard and so is my personal life. I can relate with you.

The problem is, most people who are not founders don’t care how hard it is. Investors don’t care, my girlfriend don’t care. I don’t tell my parents how hard it is because they would probably just tell me to quit and get a real job. No one really cares.

Which is why I think about Ben Horowitz blog post almost every day “Just win.

That might be the best CEO advice ever. Because, you see, nobody cares. When things go wrong in your company, nobody cares. The press doesn’t care, your investors don’t care, your board doesn’t care, your employees don’t care, even your mama doesn’t care. Nobody cares.

And they are right not to care. A great reason for failing won’t preserve one dollar for your investors, won’t save one employee’s job, or get you one new customer. It especially won’t make you feel one bit better when you shut down your company and declare bankruptcy.

All the mental energy that you use to elaborate your misery would be far better used trying to find the one, seemingly impossible way out of your current mess. It’s best to spend zero time on what you could have done and all of your time on what you might do. Because in the end, nobody cares, just run your company.

*edit

I forgot to mention that as frustrating as some parts of the journey has been, I’ve loved every part of it. I was thinking about that as I was writing the post, but since it was written for other founders (and accidentally tweeted as I posted) that’s a given. I don’t think you’ll meet a single founder who regretted taking the journey. 

"The proposal opens the door wider than ever before to high-skilled immigrants. It would offer permanent-resident status, with a document known as a green card, to every foreigner with an advanced degree in science or technology from an American university. It would make it much easier for foreign students in the sciences to stay in the United States after they graduate, and eliminate numerical restrictions that have kept highly educated immigrants from India and China waiting for many years before becoming residents."

NYTimes 

http://www.nytimes.com/2010/05/01/us/politics/01immig.html?hp

3pmsnacks:

Wale - Bedrock Freestyle

I don’t know what that crap is on the radio but listen to this and tell me Wale’s flow* isn’t ten times better. Reminds me of a very long drive home from B’more with Austin + his excellent hip hop collection and Richie asleep the whole ride. Happy Friday night, friends! I’m actually going out (ohheyyy)! 

*uncensored

bijan:

via jenrobinson:

The National - Bloodbuzz Ohio (radio rip)

NEW TRACK FROM THE NATIONAL!  (Sort of.)

A studio version of this unreleased track debuted on BBC Radio this morning. Naturally, the radio rip was on every blog on my radar before I got out of bed. Great to hear the official version of this live cut that made the rounds last year. From the forthcoming High Violet, out May 11 on 4AD. 

Wonderful. 

bijan:

The National - Terrible Love (live, from Jimmy Fallon)

New song off the upcoming album “High Violet”!

Perfect for my state of mind right now.

eeilym:

Yeasayer - O.N.E

really like this album.

but i thought you should know
you don’t move me anymore
and i’m glad that you don’t
because I can’t take it anymore
oh

Em helped me rediscover this song… heard it again this weekend at a bar.  Probably my favorite DMB song now.

eeilym:

You & Me - Dave Matthews Band

I always used to force myself to like DMB but i LOVE this song. I definitely imagine this song would be 50x better if i were actually in love. haha but anyways see the cutest proposal here. and click here to read the full story.  I DIE. my future fiance better think of something as creative and specific, this guy upped the anti.