Mark Pincus Blog

My 2 Cents on Hotjobs Scraping

matt marshall, charlene lie and others have all talked about the implications of hotjobs scraping and presenting job listings from other sites. thought i'd add my own perspective having spent many months analyzing this market opportunity for tribe. (btw, matt is becoming quite the blogger celeb in his own right with his recent wsj story. congrats to him.)

firstly, it is somewhat comforting to see the world actually move in this web 2.0 way when we've all been predicting it:) beyond ego gratification (which doesnt pay any bills), here's a few thoughts...

• what drives audience? i've never seen any proof that most comprehensive is a key driver for jobs or dates. in all our focus group studies at tribe we never found this to be true. popularity of sites like craigslist for jobs and jdate for dates proves opposite.
• people want to connect with people - job seekers have always told me they use CL because they can get to the actual hiring manager (via email) and avoid recruiters and hr people. this makes me think the winning site will have a perception of connecting people more directly.
• what drives listers?  every job lister on craigslist will tell you, 'omg, i got 10 responses in the first hour'. they do seem to care more about the immediate gratification. from this perspective aggregation is a good thing in driving more widespread viewing and responding.
• its all about brand - i believe the reason monster and careerbuilder can persist and charge such high prices is that they have brands.  brands take a really long time to build in classifieds where your audience may show up once a year or once ever. for this reason, i dont see any scenario where the aggregators win on better mousetraps. my bet is on craigslist, monster, careerbuilder and of course tribe:)

Weblogs Inc Getting Real

spent time with jason calcanis at gnomedex last week downloading the whole story on his weblogs business. jason has created a compelling model with 75 professional blogs served by 106 part time bloggers and over $1 mllion in revs. seems that with 65% of advertisers looking to get in on the blog world and such a small number of points of critical mass that jason is well positioned. and while he's done this on a shoestring (as he's a scrappy and super cheap brooklyn kid), it made me wonder what a larger company might do with the same model. seems like the major newspaper players are all thinking this direction with nytimes buying about.com and others announcing plans to launch blogging. seems that we're headed into a world where the majority of news content will be 'self-published' and the news orgs will act more as editors. in that world breadth of coverage at a low cost may beat out depth of creation at a high cost.

[aside...i had dinner last night with a good friend and old newspaper guy (who said he never reads my blog:(  he agreed that newspapers could be far more profitable without the newsrooms but worried what that meant for our democracy. it seems to me that it's only getting better when so many more voices can be heard and we have such a huge number of people vetting every story.]

anyway, i wonder how long it will be before jason's tight little operation gets scooped up by a big media company with bigger plans and what that will mean for the blog world...and democracy:)

Is the Valley Still Relevant?

interesting story in business 2.0 about how fred wilson is pursuing a new zone of venture investing (i call it new media while they call it web services), and that silicon valley is past it's prime. seems a bit ironic the day after google hits $300 a share and a valuation greater than time warner:) what's weird is that a prominent silicon valley lawyer just told me the same thing today. his perspective is at the end of the trough where he's not seeing a lot of IPOs right now.

i agree with fred, matt marshall and the reporter that new media represents a sea of new opportunities for entrepreneurs and venture backers. however, i believe that san francisco is also well positioned to go after this as the bay area remains home the highest concentration of web engineers as well as the armies of middle managers from yahoo, ebay and google that will spawn new ventures just like ex-aolers like my former partner sunil did a decade ago.

View from the front: Board Meetings

allen morgan has an interesting post about how entrepreneur/ceo's should manage boards which i will excerpt below. (these are 10 commandments from a guy he knows named john kernan). i have to admit that these sound like very good advice but also have to admit that this is why i really dont like being a ceo and working for a board. (not sure we're supposed to admit this but most every entrepreneur i know would agree too.)

i know running companies isnt supposed to be about having fun, but i also know it's really hard to keep at a job if it isnt and doing all this political crap to 'manage' my board is almost a fulltime job in itself.  i have always approached board meetings as a time to help me do my job. i figure i should be using this collective wisdom to help me work on hard decisions, mostly around strategy, rarely around operations and people.  i've been idealistic about boards, imagining them as a group of partners sharing common goals to win which also entails a lot of these rules. however, i've almost always been dead wrong. politics do creep into it and ignoring them just means that you arent positioned well to sell the answer you know is best. net result, we entrepreneurs believe we're above the politics and we end up shooting ourselves in the foot (often the head too) by doing the 80% work to identify the bold winning path then failing to do the 20% (ok feels like 80% too:) to sell this into our boards.

in my perfect world...who am i kidding, in my perfect world i'm richard branson or rupert murdoch or better, larry or sergei, and i own a controlling share and dont waste any time buttering up board members! until then, i'll toil as a mere mortal.

allen's rules...

1. NEVER have the board meetng "at" the board meeting.  ALWAYS call every director a few days before the meeting and run every important issue by them to get their input, Also update them on company performance, especially the bad news, and let them "beat you up" privately. That way, the meeting can focus in a constructive fashion on problem-solving and building the Company for the future.

2. Maximum Powerpoint show is four slides from any presenter, especially yourself. This should be the limit of director interest in detail.

3. Provide complete access for the board to everyone and everything in the Company. They will rarely use it, but it's a great comfort to them to know you are not trying to hide anything.

4. Have your key team members do almost all the presentations. It gives them exposure and allows you to make sage comments along with the rest of the board. A perfect board meeting is when 10% of the talking is done by the CEO, 60% by the team, and 30% by the directors.

5. Carefully consider every director's input and take good notes at the meeting. These people have lots of experience and many great contacts. But you make the final decisions (and if you don't, they will start to look for someone who will).

6. Give the Directors projects in their areas of expertise. It's free consulting and they usually do a good job.

7. Get in front of the board on tough decisions like top management changes, including changes to your own role. If it's going to happen, make it your idea.

8. For VC directors, try to picture how they are describing your Company to their partners, and what questions their partners are asking. Your job is to make each director a hero to their partners (or corporate boss).

9. Remember it's Company first, team second, you last. You win when everybody wins, not when just you win.

10. Make a friend of every board member. Send them interesting deal ideas you turn up, learn about their interests, make the board a "look forward to" experience for everyone.

If you work hard, always act in good faith and in the best interest of the Company -- and if you follow these 10 rules -- most VC's will still be interested in financing your next deal, even if the Company tanks.

And if the Company is a success, they will be throwing money at you!

Fred's Always On

fred has a post that spoke to me (and my girlfriend mo) about being always on. i think i was always on even before the net (also called ADD) but was more always and lacked the on. mo can attest to how hard i find it to disconnect even though we all know it's valuable. she had to put me on restricted web time on our recent hawaii trip and i was annoyed when we had no connection for a day.

i've seen this in friends too (where i find it more amusing). my friend greg recently got a crackberry and on our annual ski trip we found we lost our best talk time (chairlifts) to his new obsession. what's become so ironic is that we often have better attention via remote text interaction than live dialog. maybe some people's brains process this way easier anyway. we can all tell too when we're losing someone to their online world. the only time i know i can get someone's full live attention (or them mine) is car talk time. maybe the answer is we'll build 'phone booths' which are just destraction free zones. maybe areas of our homes will have to be no-net zones. i've often imagined how cool it would be if bars and restuarants had cones of silence that could drop down over patrons taking calls, protecting them and people around them.

anyway, thanks fred for letting prove to mo that i'm 'normal' for a certain race of human:)

Getting ahead of the plane

the most useful skill i've learned from my 8 years as a private pilot is 'getting ahead of the plane'. i've found this applies to everything else in my life.  in flying this means thinking many steps and minutes ahead so you have less work and distraction when you get to the few heavy load times like landing or flying through high traffic air space. i've found this useful in getting ahead of high load times like board meetings, busy travel weeks or other compressed periods. i always know when i'm ahead or behind the plane and my stress level directly follows. what's nice is when i'm ahead of the plane i have extra cycles to either enjoy the process in a more relaxed way or get to more stuff. my most recent example was coming back from hawaii where mo and i were so far ahead of the plane (literally) that we found ourselves with an extra hour to kill before our flight and rather than eat the bad airport food we hopped over to a nearby town and i even got to surf on the most perfect waves (for a beginner) we'd seen the whole trip. oddly, i've developed this skill a lot more in my personal life than business. maybe it's because there's a lot more moving parts to account for and a lot more herd mentality to distract me from figuring it all out for myself. 

Sky Dayton gets $440M for next venture!

just read in business 2.0 (plenty of time for these mags in hawaii) that sky has launched an ballsy new venture to bring 3G wireless services to the US. ready for this? he has raised $440 million from earthlink and a korean telecom company. now that's what i call leverage! sky has had a strong but mixed record so far as a serial entrepreneur. i'd say he's 1-1-1. (course that's better than most vc's) earthlink was a huge win. ecompanies was a big zero and boingo seems still waiting for the verdict.  real entrepreneurs like sky keep going for it and it's fun to watch (with some envy:).

Fund Mashing

i'm taking a week off of whatever it is i do in sf and hanging out in hawaii with my girlfriend. i'm having my own more ghetto version of bill gates' think week, reading magazines instead of deep thought treatises and surfing the net and even some blogging.  here's my first big thought...maybe we have entered a new era where great investment opportunities are actually worth more money. maybe the balance of market power between the capital providers and capital users is undergoing a permanent shift. we are seeing the top venture capital firms command 25-30% carries and an explosion in the number and size of hedge funds whose managers can earn more in a good year than even the most over paid ceo or innovative entrepreneur. i have been lamenting the lack of leverage for people like myself to spend their waking hours on new ventures, but maybe the  market is more efficient than i've realized. in a world of massive capital pools chasing fewer return opportunities it is exactly those people who create the most leveraged investments who will command the greatest profit for their ideas and efforts.

many people (including myself) have questioned the sustainability of this type of environment, where there seems to be more funds than actual investment targets.  however, it seems that the world of investment creation is beginning to evolve as well. in recent months we've seen hedge funds begin to replace banks and private equity firms in financing some major buyouts such as kmart and the manchester united football club (which i still dont get).  bill burnham and fred wilson have talked about vc's shifting to a more proactive macro theme based approach rather than the more passive waiting for good plans to hit their desks.

sure sounds like they're talking about the age old practice of merchant banking. i wonder if this was originally born in a time when the world's financiers ran out of enough bankable visionaries and found themselves in need of manufacturing their own.

idea capital may be open to anyone

i wonder whether the best entrepreneurs will also evolve to this merchant banking approach where they create much more leveraged investment opportunities to pursue new markets with far greater capital from the outset rather than bootstrapping.  in this new world, we may see a complete blurring and mashing of entrepreneur, vc and hedge fund. 

What's your dream job?

i received a lot of great comments on my question of 'where's the leverage?'. this smart kid blogger in my neighborhood, ben casnocha, comments that you should be in it for the love of the game and not the fat paycheck and that the daily grind is part of the price.  while ben's passion is admirable (at such a young age. i think he's in high school) it doesnt ring true.  does richard branson have to make these tradeoffs? no. he has an awesome job where he can wake up every week and devine a new product to put his virgin stamp on; and he's doesnt have to sell his ideas to anyone but the public.

maybe the right question should be 'what's your dream job?'.  i believe that for most entrepreneurs the dream job would be one where we get to come up with new ideas, have another team execute on them but maintain ultimate control over direction - ok being ceo of virgin wins hands down and probably for most entrepreneurs. 

Views from the front lines...

so fred, brad and allen have been blogging lately about the VC world from allen's 10 commandments to fred's vc cliches and brad's diary from the front. i thought some of us entrepreneurs should chime in with what it's like trying to come up with the next great idea (then get funding, market traction, revenue, profits and keep a sliver of equity). 

[this would be a cool thread if other entrepreneurs would add and tag it as 'entrepreneurs'. (and if i could figure out how to do that.)]

i'll kick this off with..."Where's the leverage?"

so the big dilemma facing most seasoned entrepreneurs today is about leverage. the vc's and other investors get plenty by making multiple bets within large funds. they can be reasonably confident that over their fund's life they can deliver good returns and make good and sometimes obscene money. entrepreneurs have to make totally concentrated bets and wait several years to see if they pay off at all. this gets hard when the rest of your business school classmates seem to make as much in one year managing their hedge fund as you hope to as your final payout if it ever comes.

so where's the leverage? well, you can try to start multiple companies but that is frought with landmines like the fact that over time companies will readjust equity to compensate current employees and investors so you can count that your equity will be highly diluted when you leave.  also, you will inevitably dilute your attention to the winner by spreading it across a lot of losers.

you can try to raise a fund and start an incubator (and party like it's 1999:). while this may be great for the investors who get to buy into your companies at founders prices, it is very hard to put a lot of capital to work and now you've reduced your payout to a carry across a relatively small number of bets (as compared to a vc fund).

you can join a vc fund. this seems to be the most popular route for successful entrepreneurs (most recently bill joy going to kp). for some people, this represents a kind of nice, easy retirement. they probably dont last in that business which gets more competitive as it gets more crowded. my problem with that (other than nobody inviting me to join:( is that i'd get frustrated with such a passive role (though some are notoriously not that passive:).

for me, it seems to be an inescapable loop of saying i'm going to do something else until i find i'm overtaken by some idea that i cant bear to see others go do only to wake up again to a 9 to 9 job with team meetings and board calls wondering how i ever wound up in the same ground hog day existence and dreaming of the next escape and the path to something better.