Mark Pincus Blog

lala - bill nguyen's latest

my old friend and startup compatriot bill nguyen is at it again with a new music sharing service called lala. i havent tried it yet, but the concept sounds really clever. lala sounds like netflix for music and takes advantage of the fact that we can all legally sell or trade used cd's. basically, it sounds like i can rip all my cd's and then send them in to lala and get a whole new batch sent back. this sounds like something that could be very popular with teens and twenty somethings.

bill has a terrific track record and is backed with $9 million from bain and ignition. nice way to launch a company. bill has a nack for ui so i'll be excited to play with his newest app. 

is ceo greed good?

there's an interesting piece in today's nytimes on a ceo who asked his board not to pay him so much. this seems to be the new mantra for business press, that any ceo who asks not to be paid is somehow a better form of the species.

why is it that in a capitalist system we (includes me) shower praise on those who seem the least greedy? we admire bill gates for giving away the majority of his fortune, or the ceo who takes $1.00 in salary.

if you had an employee who asked you not to pay him or her so much, how would you react? at first, i'd be psyched and wish there were more like her. but i would also think she wasnt that bright and worry how much intelligence she'll apply on my behalf if she's not maximizing her own.

my problem with gigantic ceo pay is less that the person is asking for it and more that their hand picked boards are giving it to them without the shareholders having any real representation. i dont see the solution as finding people who dont want to make a lot of money. there's an amazingly direct relationship between brains and dollars which isnt going to change.

the answer is more companies run by major shareholders. this can come in two forms. one is the strong founder like a larry ellison or bill gates. the other is the strong owner like rupert murdoch or more recently carl icahn, who can represent shareholders with power in negotiating with equally strong ceo's.

halsey minor's new swivel

i thought my friends at silicon beat were a little tough on halsey minor. apparently, he is relaunching grand central as swivel and they question whether its the conversion of one over complicated model into yet another.

i have known halsey since he and shelby bonnie first wandered the halls of tci pitching us on cnet, the computer cable channel. i felt sorry for them. they were too late. there was no space left for major launches of new cable channels and the 500 channels were going to be available on about 1 million digital settop boxes in about three little markets.

halsey and shelby didnt ever give up even.  two years later i heard they had moved cnet to the fledgling internet, raised money at the then unheard of valuation of $100 million and were launching the biggest ad campaign the web world had ever seen, a grand total of $1 million.

even as cnet grew and broke more rules, launching more sites under multiple new brands like news.com and download.com, i couldnt figure out how they'd ever have a big business selling banner ads. they proved everyone wrong, building a powerhouse company that is one of the few left standing today.

anyway, i have no idea what swivel is (it sounds a bit strange to be offering web services to bloggers who all seem like cheapos to me). but i've learned enough to say i wouldnt bet against halsey. if we dont get where he's headed, if halsey doesnt get where he's headed, my guess is he's still somehow getting to the right place before the rest of us.

good luck to halsey and team with the new incarnation.

is smaller safer? new startup realities?

john battelle, fred wilson and silicon beat all talk about the current reality for startups (at least in the new media space) which is that smaller is safer. what they mean is that without a clear path for high dollar exits (called IPO market), a significant number of startups are selling to big players and many more hope to. however, this can only happen if they keep their valuations low.

what's always been interesting is to realize that for a founder, the actual payout may be the same or more at much lower prices if they never raise big rounds of vc. this also implies that either they can create the same intended value without the big capital or that they do such a bad job deploying it that they dont achieve the intended results in revenue and cashflow.

to some degree this is simply enabling a beautiful mechanism for risk free, distributed r&d for google and yahoo. they dont have to bet on the next flickr. they can just wait and see who gets there, especially when these companies (like flickr) never achieve significant revenue, even when they get big audiences.

i think this may cause more seasoned entrepreneurs to raise outside capital in smaller chunks, selling less of their companies. they can play the option. low valuations enable this.

Firefox Team Cashing in?

i read that mozilla is launching a 'for profit' subsidiary so they can 'better compete with microsoft's IE'. there is a lot in this i dont follow. first, why does a for profit stand a better chance of competing? i guess they think they can attract more capital which makes sense to me. but, i'm really confused about how you distribute equity in such a venture. how does a non-profit transfer assets and then equity ownership to individuals? i just cant see a fair way to do this. if this is possible, why wouldnt all companies start as non-profits and then change status and transfer valuable assets (cash and IP) at a convenient time? there must be a big piece of this story i'm missing. can anyone fill me in?

News Corp Buys Myspace for $580M

bambi reports that news corp bought intermix, the parent of myspace, for $580m today. i have to admit that i passed on buying intermix stock a while ago at $6 because i thought that the overall valuation was too high for just the myspace asset. given the reported revenue numbers for myspace of around $9m, this had to be a highly strategic acquisition. i had thought recently that someone like viacom might be myspace or the facebook to add to their mtv properties as these sites are starting to aggregate such large young audiences. this looks like a nice fast exit for redpoint which i believe funded myspace a year ago at a $50m valuation. not sure how this worked out for them but guessing they made at least 5x, which would probably be about $50m on $10m.

Colin Powell joining KP

wow. seems like every so often our little world gets connected to the bigger one and reminds me of the power being weilded here. guess if carlyle group can hire ex presidents (GW) we should be able to at least hire ex-secretaries of state. ok, i know i'm not really part of 'we', but somehow it feels like it. as i said in the nytimes, 'there's an A list in silicon valley, and i'm not on it.' just when i started coming to grips with my massive john doerr envy, he hires colin powell as his advisor.

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:)

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.

What the VCs made on GOOG

bill burnham has a terrific post figuring out how much kleiner and sequoia and specifically doerr and moritz earned on their google deal. breathtaking at around $5B each and around $400m-$500m for the partners. agree with brad that they earned it.