Expressly. You Keep Using That Word. I Don't Think It Means What You Think It Means.

I've been way too busy to post lately. Sorry. But yesterday an email from Forbes landed in my inbox and I had to share. It starts:

Forbes is committed to protecting the privacy of its readers... However, Forbes does make available its list of readers who have expressly provided us with their permission to receive information...

I almost stopped reading there. It was an invitation to opt-in, to "expressly provide permission." I wasn't interested, so no need to do anything. But I kept reading anyway, to this:

If you would like to receive information and special offers from us and our business partners, you do not have to respond to this email. However, if you would not like to receive these messages, please use this link.

Wait, what? It's opt-out? So, by not opting-out I've expressly provided permission?

I guess it's naive of me to expect more from a place like Forbes.

Dumb Money

The juxtaposition in my RSS reader of Kedrosky's Venture Capital is an Attractive Nuisance, II and Organizations and Markets' Against Government Subsidized VC seems like a sign for me to comment on something I was striving to ignore.

Bloomberg announces a taxpayer subsidized venture capital fund just after the NBER publishes a paper on what a bad idea it is for the government to get involved in venture investing. Coincidence, of course, but shouldn't it be obvious to everyone that this is a bad idea?

I really don't understand why the bureaucrats think they can do better than the dozens of private venture capitalists and the hundreds of active angel investors in the city. We need more great startups in the city, not more investors vying to fund the few there are.

The best thing the city could do to encourage startup formation here is to make it easier to live here on a reasonable salary--startups can't afford to pay programmers like the banks can, at least not in the short-term. The City should encourage improvement of the physical infrastructure (mass transit, housing, office space, etc.) and let the invisible hand take care of the market.

Yes, Brands Work

Kara Swisher over at All Things Digital approvingly quotes NeoAtOgilvy COO Greg Smith: “No one wants a relationship with their mustard."

But, then, why do people buy the mustard they buy? Why do people persist in buying French's, Gulden's and Grey Poupon? Not price: store brands are cheaper. Not quality: no more than a tiny minority of people are going to notice the difference between French's Deli Brown and the equivalent store brand once it's slathered on a hotdog. But people persist in spending more for equivalent quality mustard, even though most people have had some opportunity to try store-brand mustards. Why?

Marketing. People have an attachment to brands. The attachment may be economically irrational, but there is no denying it. When I walk into a grocery store and stare at the hundreds of different mustards, I choose one. The one I choose makes me feel something; safe, perhaps, or the warm glow of family cookouts past. Swisher may be uncomfortable calling this a relationship, but that's what it is.

Swisher goes on to say

This odd but spot-on observation was about why big packaged goods advertisers–who are the really big spenders of the ad business–might be less than interested leveraging social media advertising and its promise of deep engagement with consumer... No one wants to interact over mustard or mayo or ketchup or most products that pay the rent up and down Madison Avenue.

She's right: no one wants to interact. But ads don't ask people to interact with the product, they get people to engage with the brand. And maybe no one wants to engage with mustard brands. But they do. They deeply engage with ads primarily because they are deeply engaged with the surrounding content. The promise of social media marketing is to reach consumers in an environment where they are already receptive and deeply engaged and then take advantage of that existing frame of mind to reinforce a brand relationship.

TV is still the master of brand advertising. Social media is the closest the web has come to TV in creating a receptive frame of mind and engagement. No one has found the secret to marketing brands online yet, but the reason is not, as Swisher implies, that brands don't work.

One Small Bug; Centuries of Notoriety

Everybody's blogging about Vanity Fair's How the Web Was Won. I found it both boring and too short. Probably because I'm old. The best quote was:

I’d rather not talk about it—sorry.

From Robert Tappan Morris.

Pinch Media Launches

Sometimes things just fall into place. When my friend Greg Yardley gave me a call a couple of months ago and said he had an idea for a new company, Pinch Media, it took me about thirty seconds to make the decision to invest.

There's an old venture capital saying about the things you look for in a company, the four P's. But, to tell you the truth, I can only remember the first one: People. Investing in the right people makes all the difference. The speed with which Greg brought on a stellar cast of investors (Union Square Ventures, First Round Capital, Dave Morgan, Mike Yavonditte and Tina Sharkey/Seth Goldstein) shows I'm not the only one who thinks that way.

Greg's got an excellent developer in Jesse Rohland, backers with all the right contacts and he knows the business inside out from his time at Right Media. Having a great product set in a growing and exciting market is just icing on the cake.

Congrats, Greg!

Other coverage: Silicon Alley Insider, TechCrunch.

Meet Our Self-Replicating Robot Overlords

This is clearly the coolest thing I have seen this month: RepRap. (via Overcoming Bias.)

Social Business

Jeff Dachis announced his new venture on Monday: building and consulting on social software for corporations. I worked with Jeff from the mid-90s to 2001 or so when my firm backed Razorfish as it grew from ten people in a single office to 2,000+ in multiple offices around the world. When Austin Ventures asked me about Jeff as part of their due diligence, I was happy to give an enthusiastic thumbs up.

And I like the concept. Certainly more than Fred Wilson. Fred says "when you think of terms like 'open APIs', 'customizable', and 'upload data/media', the enterprise with its need for security and control doesn't really come to mind." And later, "most enterprises don't want their employees to be active members of a community that it can't control, monitor, and moderate."

Fred is wrong. In the 'social' parts of a business, the parts where people interact with other people to get things done, it's not about control, it's about accountability. And that's an entirely different, but tractable, problem.

A good friend of mine spent the last year and a half using open-source collaboration and social networking tools to build bridges among her organization's dozens of international offices. Her effort has already allowed people to share knowledge (about best practices and successful local products that might work elsewhere), create new connections between employees and help maintain these new connections more easily. She had to find, evaluate, interconnect and teach a bunch of tools. Integrated enterprise social software would have been a huge head start.

This is a big opportunity. There are some intrinsic problems with knowledge sharing, etc., that I've blogged about, and these need to be addressed. But good entrepreneurs help create markets, and Jeff's a great entrepreneur.