EarlyStageVC

Two Crunchie Nominees -- Very Cool!

As the Web 2.0 has become enamored with all things social media, I have increasingly lost interest in investing in the next Facebook clone.  So imagine my surprise this morning as I saw the Crunchies nominees.  My companies, Radar Networks (a.k.a. Twine) and Riya.com (a.k.a Like) are two of the five companies nominated in the category of Best technology / innovation / achievement. 

A few years ago when I decided to return to Web investing, I made a decision that I would invest in companies that had real technological advantage.  This is more capital intensive than lots of web investments and has a longer gestation, but I figured it would pay off in differentiation and, hopefully, a better user experience. 

These companies are not without their challenges.  The change at Riya as is moved from photo classification to e-commerce has been well chronicled by Munjal.  I am happy to say that the business is doing extremely well.  The daily graphs I get on CTRs, Revenue, and Revenue/Visit  all been consistently up and to the right on a monthly basis, all year long.  Congratulations Team -- a better user experience is paying off, literally.

Twine is the still gated-beta application from Radar Networks.  I have been using Twine for about 2 months now.   I can say the promise of better information management by the use of semantics is definitely there. We still have a long way to go.  The platform is very fast and very reliable, now we are tuning features to improve the workflow. Being a gated app, I doubt we have chance to  win the Crunchie Award at Twine, even if every beta user voted.  I guess it truly is "just an honor to be nominated."

There is no guarantee that this technology-focused investment strategy will really pay off in great venture returns.  That remains to be seen. But this is still nice.

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Well, earthmine won.

Initial Experience with Twine

Today Nova Spivack has taken the covers off of Twine and he will demonstrate it today at the Web 2.0 conference.  My prior post on knowledge networks was an attempt to lay the predicate for the concept of Twine as a knowledge network.  So I'll now make this more concrete to explain how I have been using Twine to build my own knowledge network during our initial alpha period.

Knowledge networking is what we VCs do in real life.  I am constantly asking

• "Whom do we know that knows about this" 
• "Didn't we talk to someone a year ago who knew something about this?" 
• "Isn't company X a likely customer of company Y and what do we know about companies X and Y"
• "Didn't [partner z] do a reference check that referred to this new technology some time ago?"

Like everyone, we make heavy use of the web, often sending to each other the  things we have found that might be of long-term interest or relevant to a current project. Within the partnership we communicate largely through email and then we meet every Monday to sync our activities and processes.  Organizational memory is largely in our heads.

My use of Twine is trivially easy.  I use two 'on-ramps'.  One is that I bcc: my Twine account with all my emails.  (I also set up some rules in my inbox to forward copies of certain emails to Twine as well, but my email rules are not as smart and extensive as Twine.)  The other on-ramp is I use the Twine bookmarklet as I browse with Firefox.   These two methods capture pretty everything I  consume in my business life.

As the emails come into Twine, Twine enriches the email to find companies, people, and places in the body. These enriched links connect to other content I have captured as well as Wikipedia and other sources.   So now I have a thread I can follow of what else I know, read, or can find that is relevant to answer the questions above.   This is less critical in the moment than it is  days or weeks after I  receive the new information.

I do the same thing as I browse.  When I find something of interest, I can immediately "bookmark" it into Twine and associate it with the things that I track in Twine.  (I have a personal account and am a member of several Twine  groups, including the Radar Networks Board of Directors group.  Other members of the group see the same information I have place into the group's Twine account. 

This is the real power of Twine.  All the information I have been accumulating has been intelligent interconnected as a personal semantic web of knowledge.  That mimics my own ability to recall what I know.  I don't find this that interesting, yet, because my use of Twine is relatively recent.  Ten years from now, my long term recall of what I knew today will be greatly diminished, unless I use Twine.  More immediately, everyone in my groups (Crosslink Capital, Radar Networks, etc.) benefits from attaching their knowledge networks to mine.  This really allows us to create a group diligence process that represents and leverages everything we, as a firm, know.  It means I know can truly leverage the knowledge and relationships my partners accumulate. The enrichment means we all get more than we put in as we use the product.  This basic process of structure knowledge capture and sharing is nearly universal in business, from major account sales processes to product design collaborations.  We all know that email is fundamentally broken as knowledge capture, retention, and sharing tool.

There is a lot in Twine I don't use, to be honest.  Photos, videos, and threaded discussions are all part of the application.  I don't need this, today, though perhaps in the future.  And there is a lot I'd still like to see in the application, including support for  meeting creation and calendaring synchronization.

The challenge with Twine is discovering all the consumer and business use cases and bubbling them to the top.  But for a terminal early adopter, I have to say it's really going to become an important enhancement to the way I communicate and accumulate what I know (and who I know.)

This is going to be a slower rollout than most web applications.  There is a lot we don't yet know about how to best package it as well as people's usage patterns.  The computing machinery behind the curtain is substantial.  So we still have a lot to do to understand some mundane but essential things like what it costs to support a user.  So please be patient.  The private beta is likely to last quite a long time until we get this right.  We are rapidly learning to live by Thoreau's guidance to simplify, simplify, simplify.

More Than Who You Know, It's What You Know

There is a nice little article in the Economist this week talking about the glimmering appearance of semantics in web applications. We are seeing a blurring of Web 2.0 and semantic web ideas [old ppt download]. Web 2.0 is a poor man’s semantic web. I think the poor man's view is about to start getting richer.

The real value-added of semantics struck me as I was (finally) playing with Facebook a few months ago.  I’ve been on LinkedIn for years now, but haven’t otherwise been drawn to social networking sites.  Facebook has become such a force of nature, it has been hard to resist invitations to “become friends” by people I already consider friends, for fear of otherwise denying our real world friendship.  As I became engaged with Facebook I soon realized what’s there, and more importantly, what’s missing. 

Facebook as Peopleweb Lite
Facebook is a schema and some communications methods.  It defines certain data types (people, events, messages) and their attributes.  So it provides a simple set of semantics to allow me to declare a person (name, address, etc.) and the form of relationship (worked with, dated, etc.) The user explicitly declares everything. Nothing is inferred.

The brilliance of Facebook lies in its simplicity and its completeness.  There has been a standard around for years now in the semantic web community called FOAF – for Friend of a Friend.  FOAF is an RDF and XML standard for defining a person’s attributes to make a uniform, web-distributed method of inferring contact information. FOAF has never risen past the status of demonstration project, even though the technology is quite simple.

Like FOAF, Facebook has its own standard description of a “person,” but addressed the additional issues of privacy (by controls) and discovery (by directory).  Bingo! A proprietary standard wrapped in a walled garden becomes useful.  Then the garden gets a gate (Facebook API) and now it is called an ecosystem.

The Paradox of Simplicity in Social Network Design
But even with this simple semantic web for people, Facebook lacks real utility beyond entertainment, as do most social network sites.  Why?  Because they are defined around fixed schemas (schemata for you purists) which are the boundaries of the community.  LinkedIn is a fixed schema around resume history.  Myspace is a fixed schema around people and entertainment media. 

Social networks are a subset of the general class of community websites. The essential value-add of a community site is to define the schema of the community – what we have in common as members of the community become the defining features of the site.  The granddaddy of community sites is Ebay.  What is Ebay but a schema (marketplace) and a set of rules for interacting around the schema?  What is Amazon but a schema (product catalog) and a set of rules for interaction?  This simple rigidity of design makes these sites intuitively obvious to the casual user and inherently bounded in their ability to evolve past the founding metaphor.  Again, as the textbook example of a self-limiting metaphor I would point to Ebay.

I find social networks of limited utility, because they only do one thing, albeit well.  They connect rigid entities (usually people) for a limited purpose (discovery or communication).  They are shared contact databases with access control and messaging. While they are file sharing containers, they are not repositories for knowledge.  The knowledge inherent in my community is not directly accessible, only addresses. Social networks as presented today don’t help us actually do anything together.

From Social Networks to Knowledge Networks
A social network resembles the old telephone party line. While it connects us, it adds no value to the conversation.  It is the intermediary, momentarily connecting the knowledge that remains mostly in our heads. All the real action still happens at the edge of the social network, not in the network.  They provide no long-term memory or framework for accumulating and navigating what we collectively know.  I cannot imagine using Facebook to discover, accumulate, and share diligence on a prospective investment beyond figuring out who to call for an indirect reference.  Facebook's peopleweb doesn't contemplate how I might accumulate information about a person, their company,  its competitors, and customers and then tap into the related knowledge that my partners or business acquaintances might have.  Yet, the diligence process is one of connecting dots of knowledge (conversations, emails, documents, relationships) to find a pattern that yields an outcome.  The same is true for many collective activities in our communities and organizations. Hence the varieties of definitions around community - communities of purpose, communities of practice, etc.  Communities arise from common circumstance, but they persist because of a shared utility of being.

This is why I think social networks will evolve into knowledge networks.  All the pieces are place.  Facebook has shown us how a gated community can encourage declaration of knowledge (about people and relationships) and maintain a sense of control and privacy.  What needs to be extended is the method to for defining arbitrary entities and concepts beyond people (companies, locations, events, bands, diseases, hobbies, TV shows, chemicals, etc.) and allowing users to define relationships between them (owner of, owned by, included in, compatible with, etc.)  What I have just described is an explosion of meta-data is far bigger than the web itself. But the path is now clear.  No AI.  No inference engines, No voodoo.  “Just” a very large and extensible graph.

We won’t get there in one big leap.  But we will get there, one extension at a time.  Today’s social networks are a transitional Web 2.0 concept.  As they add more and more semantics about different types of objects and concepts, they will morph from social networks to knowledge networks. And knowledge networks will be more valuable and stickier, because what you know is often more valuable than who you know.

Postscript
Well, it seems the spooks have already come to the same conclusion (NYT article) in designing "A-space." They need a social network for the knowledge they gather in espionage and counter-espionage. All the more reason you'll need one soon, too.

BBC & Mashups - What Would Karl Do?

About two weeks before my last post on Teqlo, I got an email from a producer at the BBC.  They wanted to talk about Teqlo.  (Actually they wanted to talk about Radar Networks, but stealth companies don't make for compelling telly, as they say across "the pond.") Josh Dilworth at Porter Novelli PR (Radar's firm) was kind enough to suggest they talk to me about Teqlo. The Porter Novelli team did an amazing job of getting feature stories on Radar in Business 2.0 and BusinessWeek.

Quandry... Can't talk about the new Teqlo positioning, gotta stay with the "mashups are cool and we do 'em" positioning. What to do? No time to consult the leading ethicist of our time - Karl Rove. Had to make the call on my own.

As a mentor of mine once said. "the Plan doesn't change until the Plan changes."  Notwithstanding the last post, we have not officially announced a new direction; so we are still officially going the same old direction until we go in a new direction.

The result?  BBC Video Link Love.

Here's a pointer to the web page for the show Click that was about Twitter, Teqlo, and other cool stuff.  Here's a pointer to the full 22 minutes of video (Teqlo is at about 10:00 minutes in).

And here's five minutes of me talking about the emotional range of fear, greed, love and loathing that make early stage investing so much fun.

The Teqlo Adventure

Few VCs admit to their misfires, though misses are more common in this business than hits.  One of the reasons I write this blog is to add some transparency to an all too opaque business of private equity.  It has been a while since I talked about Teqlo.com here.  Some of you may be aware there have been some changes recently. Others may have been to the web site recently and said “huh?” or, more precisely, ‘WTF?”

I figure the only authentic thing to do is to talk about this again, even when it is in an ambiguous period of re-birth.  This ugly period is a re-tooling of the premise of the business to give it more clarity of purpose.  It’s not fun being in the sausage phase.

First, let me admit we went down a mashup rat hole. We have a general technology for snapping together web services.  "Because they can" is an insufficient answer to "why do people want to create mashups?"  We failed to commit to solve a specific problem for a specific market, preferring instead the broad appeal of generality.  This has changed. 

No one led us down this rat hole.  We led ourselves.   When we realized we had to make a radical shift, we had to reignite the fire with limited fuel.  We made personnel changes because the fuel demanded it, not to penalize or blame anyone.  So we did the right thing.  We cut, refocused, questioned everything, and sharpened our edge. 

The first thing we did was toss out any pretense of solving everyone’s problem.  There is an old proverb that I just invented for this situation --  “The boiling of the ocean begins with a single puddle.”  We had to define our puddle.  So we did.

A friend of mine told me a few weeks ago that Snapfish is driven by a product team that thinks a hypothetical mom named Emily is their user.  Their design mantra is What Would Emily Want?  We went out and defined our Emily. 

The next thing we did was develop a hypothesis of the ways in which web application integration would please that Emily i.e., what is her pain?  What is she trying to do? What web services does she use to do it? And how does she cope with using 3-5 discrete web applications to get something done?    What  does she do now?  Then we went out and talked to a small army of Emilys. Arrgh!  This will strike everyone as obvious and necessary.  It is. And we hadn’t done it before because we were too busy building.

Along the way we re-learned something. Name your user.  Ask her what she wants; she will tell you, and often she will surprise you.  So we did and they did. One clear consequence is that you will see more emphasis on a configurable application, not a bucket o'widgets that snap together.  Leading with "it's so easy to build what you want" is like making a diet fun – it is still a diet, no matter how much more fun it is. You only do it when you must.

So now the Company is heads down executing what we think is a re-jiggering of the basic components.  We are packaging to solve a problem - not all problems.  Nor are we packaging to provide “examples” of how you can use Teqlo to solve a problem.  Nope.  We have picked a customer, listened to what they want, and are hacking away to get to market.

We now have an Emily in mind, a clear sense of who our natural distribution partners are, what’s in it for them, and how this little puddle becomes a pond and then a lake.  We dream of an ocean, but are navigating the puddle.

I'll tell you this much about the new direction - Web-based workflow.  Teqlo is ideal for making a pre-packaged process made from web applications and stitching them together to get something done.  There is no market for Cut-and-Paste, but Cut-and-Paste is the wow factor in Microsoft Office. There is no market for reconfiguring web applications, but reconfiguration is the wow factor in workflow for specific problems.  Without giving away the punch line, I'll point out that workflow is what's missing from the world of on-demand software.

The site itself has not changed.  It is still as confusing as it ever was.  That is not important, yet.  Over the next few [weeks] [months] the site will begin to molt.  We will shed the mashup cocoon and emerge as very different butterfly. (We may even re-brand the site to clarify what this new application is.) This butterfly will not offer you the universal promise of integration of all web applications. This butterfly will promise a specific user community a way to meaningfully improve the way they use the Web in their daily lives.  And if we do our jobs well, it will also be clear how we make money, not an insignificant question.

Of course, it might still be wrong, but that's the adventure in adventure capital.

Love at First Site

Yesterday I joined my fifth board and my first for Crosslink.

Years ago I had just received a term sheet for Series A venture capital and went looking for a looking for a bank.   My accounting firm suggested we consider a certain banker at Summit Bank (New Jersey).  I came home that evening to my little rented house, called my friend Steve, and declared I had just had lunch with the perfect woman for me.   We have been married for 21 years. When you know, you know.

My partner Gary Hromadko and I met with a small SaaS company about six weeks ago.  (I will keep the specifics out, as they have not yet announced the funding.) Not knowing what to expect, we sat down and began to listen.

What unfolded was a crystalline and complete story.  The whole package was so clear and compelling, I walked out of that meeting 90 minutes later with a sense of déjà vu. We had just met the perfect deal for us.  When you know, you know. 

So what was it that rang such an obvious and compelling chord?  I can easily enumerate the points.

Greenfield Opportunity
SaaS is a platform shift in the delivery of software.  Every bozo vc knows that by now.  And we all know that existing product markets always get replicated on new platforms, resulting in new businesses built in the ashes of old ones.  Saleforce.com is built in the ashes of Seibel.  Netsuite is trying to build itself in the ashes of SAP or Quickbooks.  This one was a SaaS version of a category that was multi-billions in annual enterprise software revenues, and there is no clear leader in the SaaS version of the category, yet.

Experience and Domain Knowledge
The founders had strong credentials (both business and academic) with a record of real achievement in exactly this product category.  They knew who the customers would be, why they would buy, and why a SaaS version would be appealing.  They also recruited strong, experienced marketing and sales executives whose experience and approach to the job were context-appropriate.  The sales strategy is the right one for the business and the VP of Sales has deep experience with exactly this kind of sales process.

Clear and Simple Product and Roadmap
The product demo was short (10 minutes) and drove home all the key points.  The key success factors were well established in the earlier part of the pitch, making it very easy to see how the product met those market requirements, and why the scheduled future releases amplified the core story and did not take the company in a new direction.  The product can become a franchise.

We Came Prepared
We knew what we were looking for.  As a firm, we have been developing a SaaS practice for some time.  While we were looking at this company, Gary was finalizing our investment in OpSource, which was announced about two weeks ago.  We also are investors in Omniture, which has blossomed into a franchise in SaaS web analytics, and several other smaller SaaS companies.  I had come close to two other SaaS investments earlier in the year.  So by the time we showed up, we had a clear idea of what quality looks like, how to value it, and how to assess it. 

Our diligence confirmed our instincts.  Not only did the team check out as we expected, the customers raved about the product.   When we asked customers about switching, we uniformly heard the “from my cold, dead hands” response.

Why am telling you all this? It is not to puff up the Company. This is part of why I left the company specifics out of the story.   The truth of this business is that it is often one of love at first sight, or never to be loved.  It is rarely the case that the second or third impression is the one that charms.  Probabilities asymptote to zero, not to one. Test yourselves against the first three points, because this is the simple set of criteria most investors use.  Test your audience against the fourth.  Are you talking to someone prepared to appreciate the opportunity you are presenting?

I think we went from first meeting to term sheet in about 10 days. It did take me a little longer than that to get married after that first lunch.  She needed to do a lot more diligence than I did.  When you know, you know.

P.S. August 14, 2007.  And now you know, too.  

Flattery Will Get You Nowhere

I haven’t posted something new in quite a while.  There are lots of reasons, not the least of which is that I try to comment on patterns I see which have not entered the general discourse about startups.  This one is about the seduction of the startup CEO – a pattern of distraction I see all too often.

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Startups are the stem cells of our economy.  They represent the hope and possibility of something new, invigorating, and transformational.  Startups are new ideas, often self-selected with leaders who see a few moves ahead from the rest of us.  At least that is the hope.

It often feels like the scarcest resource in a startup is money.  It is not.  Time is scarcer.  You can raise more money, but you cannot raise more time.   

New companies are interesting precisely because they are new.  If you’ve been doing this early stage stuff for while, you begin to recognize that there are certain life forms that get their nourishment from the new.  The most obvious are venture capitalists themselves.  We VCs all harbor the secret fantasy of finding the next big thing before anyone else recognizes it, even the new company itself. 

Nearly as obvious are Established Companies – the putative ‘partners’ of the new company. This comes in several forms – the line of business meeting, the business development meeting, and the corporate venturing meeting.  They, too, are driven by a discovery fantasy.  They are looking to discover growth DNA to graft.

All this attention is seductive for the new CEO.  The new CEO has the fantasy closing the single transaction that instantly transforms the new Company from obscurity to dominance.  You can hear this hope in the treatment of institutions as individuals.  “We had a good meeting with Bank of America.” “We just got an inquiry from Toyota.”  “Far West Ventures wants to meet with us.”

One of the most common mistakes small companies make is mistaking “opportunities” for opportunities. Most of the time these “opportunities” are distractions that drain energy, resources, and most of all, time.  People don’t talk to institutions. They talk to people.  When you have a “good meeting” with a potential partner, you really had a meeting with people in an organization. 

These people have their own agenda, only a portion of which is institutional.  A large part of it is personal.  I can’t tell you how many times I have seen a new company take two or three meetings with someone from a big company, only to culminate in a conversation in which the big company person uses the new relationship to disclose that s/he is leaving and looking to join a company like yours.

Another frequent outcome is the set of “good meetings” that lead to the “no, thank you” result.  Usually these are result of a process of discovery and education engaged in by the inquirer and the new company respectively.  The inquiry begins with a sense of genuine but diffuse excitement about “your space.”  Eventually as you spend time with them, the inquirers are bit more educated about they do want and a lot now more educated about what they don’t want. They don’t want companies like you.  This is equally true of companies and investors.  You are worse off than you started. You have spent precious time and you have educated one more resourceful and intentioned group about your market and the strategic contours of the opportunities within.  No good can come of this.

But not all “opportunities” are illusory.  Some are real and truly transformational.  What I try to get my companies to do is apply basic sales skills to this question of partnering and inbound opportunity management.  The undisciplined salesperson will chase every inbound inquiry in the hope of finding the “bluebird.”  The disciplined one will ask qualifying questions of the inquirer.

• Why are you interested in this sector?
• How does this fit into the core business or business strategy?
• Is there a line of business directly impacted by this sector?
• Does the line of business have an objective in this sector for the coming year?
• Is there a specific budget or program associated with this sector?
• Who is responsible for this sector?
• What kinds of companies/products are you looking to evaluate or partner with?
• What other companies/products have you considered?
• What were your conclusions about those other alternatives (likes/dislikes)?
• Is there a timeline or desired time goal for building a relationship with someone in the sector?

These questions may seem too direct to pose to an inquirer.  After all, you are small and they are big. They have the power in the conversation, or so it seems.  But if they have a well-formed interest, they will be all too happy to share these data with you to move the conversation along rapidly.  If they don’t, they are looking for an education.

Save your time. This is not the Academy Awards.  It is not an honor just to be nominated. It may be flattering to be called; but many are called, and few are chosen.  And this flattery will get you nowhere, fast.

Audience Measurement is a Dismal Science, too

My prior post certainly stirred up a shit storm of foment.  There were really two parts of the post.  One part was the personal POV about sameness in the Web 2.0 startup community.  The second point was the consideration of some larger indicators. 

As was nearly universally pointed out, Alexa is unreliable. However, there is a difference between lack of reliability and systematic bias.  What struck me was apparently consistent phenomenon across the three sites that I chose.  What I did not do, and this is my mistake, is corroborate this measure (Alexa) with other measures.  Below comparisons for Gigaom.com, Techcrunch.com, and Technorati.com on Compete.com and Quantcast.com.  Clearly the conclusions drawn from the Alexa data are inconsistent  with these sources.  While I stand behind my original observation that the wheel of innovation is largely spinning without progressing, the data from these sources do not support the conclusion that the general population's interest in what's new in the web 2.0 community is on the wane.  My apologies to all for trusting a single source.

BTW, for some reason I could not get Quantcast to generate a graph with more than 2 days' data for Gigaom, which is why its so limited. 

Web 2.0 - Over and Out

Many of us in the VC community have been quietly wondering about the state of Web 2.0 innovation. We aren’t seeing much. Startup activity remains strong, but the consumer web landscape seems to be populated with the same bodies with different skins.  Another video deal here; another social networking deal there, and social [feature] everywhere.

The apogee of this Web 2.0 hit me on Friday when I was having lunch with my daughter in San Francisco.  There was a conversation at the table next to us between a 30-something and a 50-something, The younger was explaining to the elder that they had web site with the following attributes

• Users can share any kind of information from files to photos
• Storage isn’t expensive, so we don’t police it today, yet
• Users can invite their friends; that’s how we get new users
• We launched a few months ago and are doubling every month
• We haven’t quite figured out our revenue model, but we think it is freemium (“Let me explain what that means…”)

Of course, this is the generic Web 2.0 company template. Overhearing the dialog felt like the 2007 version of Joe Kennedy getting stock tips from his shoe shine boy. Web 2.0 is in the water, drink up.

We now know the fourth quarter of 2006 witnessed the mainstreaming of Web 2.0.  It began with the YouTube acquisition, followed by a rather incumbent-centered Web 2.0 conference, culminating with the coronation of user-generated media as Time’s Person of the Year.

The notion of Web 2.0 as a wave is now rather long in the tooth, as cycles go. I believe Tim O'Reilly and John Battalle first coined the term in early 2004.

I thought one way to check the energy dissipation around “Web 2.0” would be to look at Web 2.0-centric media.  Three properties that one can reasonably say are pure plays in the Web 2.0 mainstream are Techcrunch, Gigaom, and Technorati.

[Note: the following Alexa data is NOT consistent with other sources.  Please see my subsequent post for additional data from Quantcast.com and Compete.com]

[3/28/07 Update: See this post by Frank at DeeplyGreen showing that Alexa data actually is corroborated by authoritative site data after all. Nice job Frank.]

Say what you will about Alexa ratings’ accuracy, all three of these properties show a similar falloff in Reach from their Q4 peaks, all notably right around the Web 2.0 Conference.

I am not suggesting that Web 2.0 services are losing steam.  On the contrary, the concepts are quite main stream.  Take the poster child for user-generated participatory content - Wikipedia (below).  It's a monster.      

Much of the "easy" innovation seems to have been wrung out of the Web 2.0 wave.  Web 2.0 was cheap - thanks to open source, simple - thanks to RSS/REST, and distinctive - thanks to AJAX and Flash.  It helped more than a little the Google has continued to entice us all with the abundant profits in Internet advertising.

Now the hard work begins, again.  The next wave of innovation isn't going to be as easy.   The hard problems in the WWW are no longer usability or ease of everyday content  creation.  These problems are solved. Digital cameras, SixApart, WordPress, and digital video cameras showed us how ease it could be.  Now the hard part is moving from Web-as-Digital-Printing-Press to true Web-as-Platform.  To make the Web a platform there has to a level of of content and services interoperability that really doesn't exist today.   

The Web today still resembles MS-DOS more than MS-Windows.   Every website is an island, an island that knows nothing about any other website.  This is no different than the world before the Windows Clipboard.  All 640KB of memory was available to whatever application was running.  The point of integration was the User.  As it is today.  Ask anyone who uses a SaaS application.

I am not alone in observing where the world is going.   The hard problems in the vision of a true web-as-platform  involve  all the usual hard computer science issues.  How can we normalize information from disparate sources to make it interoperable?  How do we get to a lingua franca without waiting for moribund standards (think CORBA and SOA)? How can we then manage the transition of legacy information and services into this world of interoperability?

VCs have always made money at finding the ideal point of friction between the Present and the Future.  Profits accumulate in the gap between What Is and What Is Possible.  Web  2.0 is now firmly in the category of What Is. 

The only thing I can say in defense of "Web 2.0" is that it's not "Venture Capital" (from Google Trends).

Teqlo - A Preview

UPDATE

The crack Marketing Team (a.k.a. Rod) made a terrific teqlo variant of the The Machine is Us/ing Us video showing how Teqlo works. (see the original here, more interesting than the YouTube version, BTW)

ORIGINAL POST

The Teqlo team has decided it is time to provide a sneak peak to show the world what they are about.  So Teqlo.com is open for preview. But before you go there, let me set  a few expectations.  This is a live, production version of the technology, but this is not a demonstration of the business.  You are going to go there and say "why would I use this routinely?"  The answer is you won't. We don't expect you to, and this is not the way we expect average people to use this technology.  We are intentionally exposing the platform part of the technology to test our ability to scale the engine as people bang on it. 

This release is a demonstration of the engine and the technology is not trivial, even though the initial use case looks like it is.   Let me illustrate with simple walk through. 

When you sign up on Teqlo, you'll get a desktop that looks a bit like some more mature products like Netvibes. This is just to give you a home page - a working canvas.  The power of Teqlo is in the Applications and in the Builder.   There is really only one Application on Teqlo.com today - Leads and Calls.  It lets you search Linkedin and DabbleDB to find people and save their names in a contact list.

The magic of Teqlo is behind the scenes and you can see a view of it in Builder.   The Builder is the work area where YOU can build your own applications from widgets, provided the widgets represent real applications like Google Calendar and not just simple RSS feeds.

Below is a series of pictures to illustrate the point.  I built a simple Application that
1. Searches Ebay for an arbitrary product (I like 4x5 cameras; so I searched for Linhof brand)
2. Lets me select the ones I want to track and then Teqlo...
3. Automatically puts them in my Google Calendar
4. Automatically puts them on a list to save for later
5. Automatically maps them on Google.

Here is the result

Now this is trivial example, but it illustrates some interesting things. First, if you go into the Builder (tab on the menu bar), you can pick from a few widgets that are in our catalog and you place them on a canvas. See the next picture.

The real key to building this little application is in what we call the Interactions Editor.  The IE (ick, we need a better name than this), allows you to say which interactions you want between any two widgets.  The IE has to know what actions and reactions are permissable for any widget and it has to validate that these two widgets can share data, i.e., share the same data microformat or other representation.  Teqlo automatically routes data between applications continuously as the data change.  So as you actually interact with the Application, such as de-select an entry, it automatically updates the interactions.

This is what's known as non-procedural programming.  The order of the rules in the Interaction Editor doesn't matter.  There is no control logic at all.  Teqlo flows the data to wherever it needs to be.

This is what makesTeqlo different. This "Application" was assembled without any javascript or any other programming by me. Granted, it is not super powerful.  But this is a function of the limited widget library, not the approach.

By the way, to give you a hint of where things are going, take note of the fact that you can have multiple "canvases."  What is a canvas? It is a page or a part of a page.  So you can have real-time applications that render different views to different users on different pages anywhere on the Web, all simultaneously.  You update the search list on Ebay and it can update a calendar (or something more interesting) on a page that I am looking at in real-time.  "Web as a platform" just moved from a Web 2.0 slogan to something concrete.  Think messaging; think feeds and events; think true collaboration.

Stay tuned.  Teqlo looks like a mashup tool today, but we have more interesting, larger, and more focused intentions.  As I said, this release is just a proof point.