Start-up culture – a location-based service?

There have been a lot of stories lately about the importance of
location, or lack thereof, to an Internet company’s success.  Pascal
Zachary wrote a New York Times piece recently entitled "PING: When it Comes to Innovation, Geography is Destiny" where, essentially, he argued that Silicon Valley’ is the place to be if you want your venture to succeed.  Tom Foremski, In his post yesterday, went as far as saying that "Silicon Valley is rapidly turning into Media Valley–and New York, NY
should look out–the capital of the media world is shifting about 3,000
miles westwards."  Come on.

A number of people have argued for and against the theory that
location, particularly being in Silicon Valley, is a key success factor.  While
the debate is interesting, I’m not going to rehearse in detail the
arguments in support (e.g. Silicon Valley gives greater access to
engineering talent, money, magic, etc.) and against (e.g. Skype didn’t
come from the Valley; there’s less Kool Aid drinking elsewhere, etc.).

What I will say is that location can enable a company to foster a
certain type of culture.  That culture can shine through the company’s
products and image, and it can be a key ingredient of success.

Wired ran a piece last week called "Web Startups Reboot ‘London 2.0’"
that detailed the city’s burgeoning tech venture scene.  In it, Martin
Stiksel, co-founder of Last.fm (which is rumored to be entertaining a $450 million buy out offer from Viacom), praised his company’s East End location,
saying "if Last.fm would have started in Silicon Valley, it would
already be
very derivative and bland like most of the projects coming from (that)
part of the world.  It’s great to be here."  While that is a broad
generalization and maybe a bit defiantly Euro-centric, there’s definitely some truth in it.  In fact, at least
where digital music is concerned, it reminds me of my own experience.

My first venture, Cductive, was an early online music retailer of mp3
downloads and custom CDs.  We started in a tenement apartment in New
York’s Lower East Side
in January 1997 (when it was a lot different than today).  We
bootstrapped and angel-funded the company’s development over three
years until we sold to main rival eMusic,
a company then based in Silicon Valley which was publicly traded and
had raised about $120 million in private and public equity.  Clearly,
both companies were too early.

At Cductive, we had a group of hip, young, modestly paid employees who
lived and breathed music.  Even our lead programmer, Bing, was an
accomplished DJ.  We worked in a open warehouse loft, where music
blared loudly and continuously.  We went out to clubs until late to see
bands and mingle with artists and indie label folks.  Our site was edgy – black in color with a cobra as
our logo.  This  culture was created partly by
design, partly because of limited funding, and partly because we were
based in New York.  We signed up hundreds of labels without big advance
payments, largely because we knew them and their music.  They felt
comfortable dealing with like-minded people. 

Although eMusic was probably the best known first wave digital music retailer and helped kick start the digital music revolution, they
were cut from the typical Silicon Valley start-up cloth.  They were overly funded (like most ventures back then) and housed in luxurious but sterile corporate offices in Redwood City,
CA.  They had some very talented people, but, at its core, it was a
tech company – with a tech company culture.  In fact, the only time I heard "music" in their
offices was when someone said the company name.  That was eMusic 1.0.
The company is now headquartered in New York and
owned by Dimensional Associates (which bought it on the cheap from
Vivendi Universal a few years ago).  Now that digital music is mainstream, portability has been solved through the iPod, and the company has continued our original focus on open mp3 (which provides complete interoperability), eMusic is now doing quite well.  It’s the #2 music download site after Apple’s iTunes Music Store.

eMusic certainly went through ups and downs and was always bigger than
Cductive.  However, Cductive would never have gotten as far as it did
on a slim budget — to compete with eMusic so effectively that they had
to buy us — without a street-smart, music obsessed-team and a
left-of-center culture.  I feel that we were able to craft that culture
in large part due to our downtown New York location.  So, when I hear
Last.fm credit their edgy East End home as an ingredient of success, I
understand.  In fact, besides strong traffic and community, perhaps it’s partly their
cool image and hipster appeal that Viacom sees in them.  After all, isn’t
that what MTV had going for it early on?

3GSM – 3 days of Gastronomy, Socializing, and Mobile

I returned yesterday from over two weeks in Europe, culminating in a three day stay in Barcelona for 3GSM. As always, it was a great show.  Everyone in the mobile industry attends – over 55,000 people this year – so it’s a worthwhile event for the keynotes and panels, the tradeshow, and the social events.

Personally, I prefer the Barcelona location to Cannes, where the conference had occurred for many years.  Although I love France, 3GSM takes place just a few weeks after MIDEM, the big music conference of the year which also takes place in Cannes.  Going back so soon afterwards is a bit like Groundhog Day.  Barcelona is a better spot for other reasons though.  It’s a great city, with stunning architecture, much better conference facilities than Cannes and more to do outside the conference.  Cannes seems like a town past its prime, whereas Barcelona is clearly a city that’s been undergoing a renaissance over the past decade or so.  Naysayers long for the intimacy of 3GSM in Cannes, and it’s true that it’s logistically easier to see everyone while strolling the limited confines of La Croisette.  However, even at MIDEM, Cannes is relatively crowded.  It’s simply too small for the mobile industry.  Just do the math: global mobile revenues are about $600 billion whereas global music revenues are around $30 billion — 20 times bigger.  One completely unsubstantiated rumor I heard concerned me – that 3GSM may return over the next few years to Cannes.  Please, no!

The most talked about areas related to media were as expected – mobile advertising, mobile social networking, and, of course, the iPhone. 

On the mobile advertising front, I saw a number of the key players – Shaukat Shamim of Rhythm, Paul Palmieri of Millennial Media, and Patrick Parodi of Amobee.  Yahoo unveiled its launch of mobile display advertising platform in 19 countries. 

While I was there, CNN ran a spot on mobile social networking that featured execs from Facebook and other start ups.  If you want to read up on mobile social networking, I highly suggest reading the blog of my pal Shawn Conahan, CEO of Intercasting Corporation and former CEO of Moviso.

As far as iPhone buzz went, it seemed that everyone, most particularly rival device manufacturers were discussing the soon-to-be released device.  Most rival comments embraced Apple’s entrance, saying it would add even more credibility to the growing music phone sector.  However, beneath those comments must lie a certain amount of anxiety.  On Sunday, I got to play with the new Sony Ericsson Walkman W880i for the first time.  A good description of the device and the launch event is here.  I found the ultra-slim 3G phone (at the tiny width of a CD case) to have an elegant and intuitive UI and to be a very sexy device.  Sony Ericsson has been selling a ton of Walkman phones, particularly  in Europe and Asia, over the past couple of years.  I believe the W880i positions them extremely well in the music phone market – Apple or no Apple.

I gave a keynote regarding mobile media at the Government Mobile Forum, a private conference at 3GSM designed for national telecommunications minsters, regulators, and their delegations from around 45 countries.  Although I majored in government at college, I am hardly a regulatory expert.  So, I’m pleased they had me there solely in my capacity as a digital media guy.  Of course, I recounted the mobile music video story told to me by Chris Blackwell and described in my previous blog posting.  I also couldn’t resist showing an excellent Saturday Night Live skit of Steve Jobs unveiling the iPhone.

Besides not having enough time to meet all the mobile gurus at 3GSM, my one regret is that I didn’t eat at Cal Pep, reportedly the finest tapas restaurant in the city.  I had many excellent meals hosted by friends and their companies at top restaurants including Tragaluz, Via Veneto, and El Pelauet.  Barcelona is truly a gastronomic city.  Knowing that I am a tapas fanatic, several of my friends urged me to go to Cal Pep.  Here’s looking forward to next February and the continued residence of 3GSM in Barcelona!

The Aikon – coming soon on big and small screens

Last weekend I attended a Nokia retreat in the Austrian Alps.  It took place at a resort called Zell am See.  What a stunning location!  We stayed at the Grand Hotel which sits right on the lake, surrounded by mountains.  I flew into Munich, which is about a two hour car ride from here.  My taxi driver, a Zell am See native, told me the lake is over 70 meters deep in some parts and is home to a fish almost two meters long.  He was quick to point out the good life that locals lead here – skiing all day on the glacier in the summer and finishing off with a long swim in the lake.  It’s hard to argue with that! 

Noticing the red-eye fatigue in my face, the driver also recommended a local remedy – a nice large, cold Stiegl.  That’s the beer in these parts. I took the month of January off booze.  While I doubted the Stiegl will do much to cure jet lag, I was certain about one thing – it was going to taste great.  And it did!  A fine pilsener.

Nokia’s retreat was called “My Connected Life” and it was a well-produced event.  In addition to putting everyone in this beautiful spot, they gave us great ski gear and lent us each a brand new N95 handset .  The handsets are soon-to-be released “multimedia computers” as the Nokia folks describe them.  They’re excellent dual mode devices with 2GB memory cards and 5 megapixel cameras.  They have a bunch of web 2.0 widgets and capture video with ease.  One of the most interesting features is the easy swapping between portrait and landscape display, useful for typical phone and multimedia functions respectively, by simply sliding the front of the phone.

There was a good crowd of senior Nokia execs and prominent digital media types including MTV’s Jeremiah Zinn, Sony BMG’s Ole Obermann, Flickr’s Stewart Butterfield and Six Apart’s Barak Berkowitz, just to name a few.  However, the star of the show was the N95 itself and the innovative and collaborative project in which the Nokia team engaged us.  Each attendee was urged to take part in the creation of a user-generated mobile movie using his N95.  Countless images and videos — of attendees on the ski slopes, in town, and hanging out in the après ski bars — were uploaded to help create a movie with a James Bond-like theme and is to be produced by a professional filmmaker.  The all important and elusive “Aikon” has gone missing and is a matter of urgent global security.

The value of the N95 was made most clear to me when anxiously navigating a black diamond slope.  Half way down, Ole took a video of me trying to hide my fear and saying a quick hello to my wife.  I mailed it to her on the spot and, minutes later, she was seeing the little movie I made for her from her office in New York.

At the closing dinner, the movie trailer, which was produced just hours before, was shown.  I have to admit, the results were both entertaining and inspiring for what will soon be done with such always-connected multimedia computers.  Yours truly made the cut in a small, supporting role — a mystery man in dark sunglasses riding a chairlift.  Despite the brainpower in the room, all attendees were dished a dose of humility in learning, to our surprise, that the mysterious Aikon is simply Nokia spelled backwards.

Happiness is a warm mobile music video

Chris_blackwell_01Over the past eight years, I have had the privilege of becoming friends with Chris Blackwell.  Chris is a living legend.  He’s the fiercely independent music entrepreneur who founded Island Records, brought the world artists like U2 and Bob Marley, helped revitalize Miami’s South Beach, and was the first music mogul to embrace the Internet.  He’s also one of the nicest, funniest guys I know.

On Wednesday, Chris had a group of friends over for dinner at his apartment on the Upper West Side.  About half of them had just returned with Chris from a trip to Africa.  They had journeyed to the Festival in the Desert, a music and Tuareg culture festival in Essakane, Mali – about 40 miles north of Timbuktu in the Sahara.  The entire journey sounded amazing.  Everything I heard and saw about the trip — the stories, videos, pictures and excitement in the faces of those who went — convinced me that I must go one day.

One story really stood out and got me thinking.  Chris recalled how they were traveling through the desert, somewhat lost, in the middle of nowhere.  When someone refers to Timbuktu as a major hub, you have to take his word that it was really the middle of nowhere!  From across the horizon, a vehicle raced toward them.  It was a jeep mounted with a 50mm gun being driven by a young, local guy.  Understandably, Chris and his pals were a little concerned.  The local wasn’t the friendly type.  He  confronted them, asking who they were and what they were doing.  As the local asked more and more questions, it came out that Chris was the music man who discovered Bob Marley.  Suddenly, the heavily armed local reached in his pocket, drew a darkly-colored object, and pointed it toward Chris.  It was his mobile phone.  Visibly overwhelmed and smiling with joy, the local pressed a few buttons and presto!  Immediately, they were dancing in the middle of the Sahara, to the rhythm of a music video being played on the phone – Bob Marley’s hit song "One Love."

Wow!

I often say  that there are two things young people can’t live without — their music and their mobile phones.  For this cannon-sporting youth, I guess two out of three ain’t bad.  His love for music and mobile proved that, even in the remote Sahara a few hours outside Timbuktu, their universal appeal is undeniable.  I didn’t learn what type of phone it was or how he loaded it with a Bob Marley video (presumably, it was side-loaded, unless Sahara Cellular has a faster network than Cingular.  Perhaps!).  Given that the local was in some type of military, he probably had greater financial means and access than your average Malinese.  Regardless, this is an amazing tale and a colorful, real world reminder of just how quickly mobile entertainment is transforming the world — not just the developed world but, perhaps more importantly, the developing world.  Most people in the world, whether they be in Africa, Asia, or South America, will be introduced to digital music through the mobile phone and will continue to consume it primarily through that channel.  The mobile is their first phone, their first camera and their first music player.  It may soon be their first computer and their first credit card.

I wonder if the gun-toting young man thought about his encounter and reflected for a short while on mobile entertainment?  After all, how many of his countrymen before him, if they had met the man who introduced the world to Bob Marley, could have instantly proven their devotion as fans?  More importantly, how many of them could have shared their passion and created a spontaneous concert in the middle of the desert with strangers from across the globe?  And lastly, how many of them could have plugged Blackwell’s digits right into their phones (along with his picture) to ensure that their first chance meeting might not be their last?

Back in the trenches

Yesterday was my last day at EMI Music, where I had been overseeing global digital strategy and business development.  I resigned at the beginning of November as I’m keen to doing something entrepreneurial again.  With my transition period over and a lot of new-found time on my hands, I’m looking forward to focusing on the abundance of opportunities in the digital media space.  I don’t know yet if I will start a new venture or join an existing one, but I am energized and excited about the future! 

Jet lag, daylight savings time and blogging

This is my first official blog posting of more than one sentence.  I had toyed with a blog a couple years ago, but never really posted anything.   As I sit here on my 6th jet lag-laden day back in New York after being in Asia for a couple weeks, I think now is as good a time as any to see if I like blogging or not.  So I just set up the trial account on TypePad and will give this a shot.  If I find I don’t blog enough, I’ll just kep everything on the Vox account I set up a couple of days ago.  My pal David Porter recommended both highly.

So, this is pretty serious jet lag.  I am coming up on a full week of waking up at somewhere between 3 – 4:30am and staying up through the day.  Of course that means that I fall asleep by 8 or 9pm which hasn’t helped the cycle.  I haven’t bothered looking into remedies because I thought it would be a two day affliction.  It’s probably time to do that now.

To add insult to injury, I woke up today at 5am (thinking I had made progress) only to realize that the clocks were turned back and hour!  So, another 4am start.  Like everyone, I love the extra "fall back" hour, but this year I wish I could have taken a rain check. 

I went downstairs to see if any of the delis are open so I could grab a coffee.  Only bars.  I live in Williamsburg, Brooklyn and the neighborhood was still buzzing.  It seemed like plenty of people were relishing the extra boozy hour crawling between the many clubs and pubs around here.  I think I’ll have to wait another couple of hours for that coffee.