I thought “Town Holler” was organized by Foursquare. Nope.
The event, the first of its kind as far as I know, was organized by a user and fan of Foursquare and managed to draw 50+ people to come out at 4pm on a Saturday in the middle of summer.
It started at One and One in the East Village, and everyone drank beer and wore name tags with his/her name and the name of the place where he/she was the “mayor”. The event went on into the evening with people coming in and out and the crowd moving to different venues around the East village.
I met some new people - not necessarily “strangers” but definitely new faces. They were friends of friends, in a similar field, had similar interests, etc. Not friends, not strangers. Fr-rangers. Or maybe just other “foursquares”.
It reminded me of Paul Graham’s quote that I love: “Better to make a few users love you than a lot ambivalent.” Foursquare is a great example of that quote in action. People care enough about the product to self-organize and show up.
Through events like Town Holler, Foursquare is helping to solve an issue that social networks, dating websites, and location-centered local sites have been trying to solve for a while: meeting new people and finding new places. And Foursquare, so far, does it best. Why? Because it’s built for mobile devices. After all, when’s the best time to meet new people and find new places:
a. while at home surfing the internet
b. when you’re already out and about
Yeah, that’s what I thought.
And then - oh yeah - there are the HUGE potential benefits for local businesses. The biggest challenge for a lot of local businesses is foot traffic. They want bodies in their establishment spending cash money. Foursquare drove a hoard of people to a group of local bars during the dreary afternoon lull - and the establishments were more than happy to provide drink/food specials as a result. Sounds like win/win to me.
If anything, yesterday’s event was Charlie’s post brought to life. I knew it before, but saw it so clearly yesterday: Foursquare will soon be the default engine for connecting people to local businesses and to new and exciting things around them.
If you believe that bit.ly - Twitter’s default domain shortener - is going to re-organize and re-curate the web, there’s got to be an arbitrage opportunity there, right?
I missed the first round of really juicy domain squatting because I was 11 years old when all the good, generic domain names were registered. For you non-internet-lovers: registering a good domain name like travel.com in the mid-1990s and then holding it would likely yield millions if you still owned it today. So I’m keeping my eyes out for round two.
Here is my thinking: There are several reasons why people pay so much for generic domain names, like fund.com, which was the highest domain transaction in 2008 and sold for just under $10m.
One is direct traffic. Yes, there are those people that decide they want some clothes, so they go to their browser and type in clothes.com. I don’t know who those people are, but apparently lots of them exist.
Second, supposedly Google’s search algorithm favors domain names with the searched term in the title, though this is completely unverified.
Finally, there’s credibility. Some people, unfamiliar with the fact that any know-nothing hack can go register a domain name, believe that if you own digitalcamera.com you’re somehow a credible authority on the subject (“on the internet, nobody knows your a dog”).
When you shorten a URL using bit.ly, there used to be the option to pick a “custom name” for your shortened link, a feature they disabled as of Monday July 20 a feature that you must be signed-in to access as of the homepage update from July 20. This custom name can’t be changed, and once the name is used that’s it. I was playing around with this feature quite a bit over the weekend.
The Plan
So I decided to make some bets. This has so far cost me nothing because bit.ly is a free service (remember - in the very early days of the web it was free to register domains as well). I took some generic terms and am having bit.ly forward them to a website I own. The terms I got are:
This, I believe, places me squarely in the category of “know-nothing hack” that I mentioned above. Regardless, I plan to make landing pages with ads and see what happens. To me, this is a long-term bet. If the internet is really going to be re-curated by services like bit.ly, then this is good real estate to squat on, though it will take some time and additional structure like an improved bit.ly search and the introduction of real-time search added to major engines.
I think this could go either way.
Potential for jackpot: As bit.ly links become more ubiquitous, they gain credibility. Now when you see a bit.ly link, you know that it is a human-curated link to something. Throw a keyword in there and it adds extra credibility. http://bit.ly/promdresses? Well gosh! This must be the best site on the web about prom dresses! Additionally, if there is a more robust bit.ly search in our future, throwing a sponsored ad on the side with the keyword in the domain will I bet yield significantly more click-throughs than the typical letters and numbers ending.
Additionally, bit.ly’s got volume. As of June, this was on the order of about 150 million clicks a week (source here). Bit.ly is essentially prime domain real-estate, v 2.0. There’s enough attention around bit.ly links that I believe it’s only a matter of time before the system-gamers pounce. Just ask Digg.
The crux of the argument is this:custom names on some URL shortening services are free, but good keywords are scarce.The supply and the demand aren’t aligned. If you wanted to, you could write a script that would assign ALL good keywords to your ad-filled landing page of choice, just to test the theory.I’m afraid I don’t have that much patience.
Potential for nothing: You don’t own your bit.ly links. Yes, you can assign the keywords, but the company could go back at any time and change where the forwarding links are pointing. Additionally, since there’s currently no search engine that favors such keywords, for now there’s just the potential for direct traffic.
What does this mean for brands and public figures?
Yet another opportunity for “reputation management” by the masses. I figured surely the publicists would be on to this by now. Nope. Instead, the current service functions as a kind of stumble-upon for keywords. What is bit.ly/michaeljackson? A random blog post about a staph infection Jackson had back in February. Bit.ly/generalmotors? An article about the GM bankruptcy.
I see bit.ly as the next-generation of crowd-powered content curation. Personally, I have pointed bit.ly/wellsfargo to Get Satisfaction’s Wells Fargo page, because man their customer service is BAD. And bit.ly/janetjackson goes to Rhythm Nation. Natch.
Because no one except for bit.lyowns the links, it’s likely tough to make changes once the keyword has been assigned. So bit.ly/tomcruise will forever point to his crazy Scientology video. Sorry Tom.
The future of SEO
What does this mean for the future of SEO? Tough to say. Real-time search is coming, that’s for sure. Because of bit.ly’s real-time tracking stats and analytics I have little doubt that it will dominate, at least for a while. There is no indication that using a bit.ly custom keyword will have any effect at all on future real-time search algorithms, but that’s not where I see the potential. I think it’s on the consumer side. Essentially: if the average web user starts noticing bit.ly links everywhere they will be more willing to click on targeted bit.ly links. For example, if I was searching for “headphones” and I saw google.com/headphones would I click on it? ABSOLUTELY. Google is a trusted brand because it is absolutely everywhere. Bit.ly is heading in that direction.
Ownership + Moneymaking for bit.ly
Bit.ly hasn’t stated what their revenue plans are. Do they have a top-secret revenue model? Probably. For what it’s worth, here’s my suggestion:
I see the future of bit.ly as both a search engine and a registrar. They can employ a standard search setup with organic results in the center and sponsored links on the side, except that ALL the results will be bit.ly links, a move that I believe is called “branding genius”. Start charging for the custom keywords - which will create a market where there wasn’t one before. Let brands, public figures, and anyone with a trademark own their bit.ly domain (similar to Twitter’s “verified accounts”). Allow users to put their custom-keyword-sponsored-link on the side of bit.ly search. The problem with that, of course, is that once a keyword is assigned it can’t really ever be changed.I would say a few years into the future the way to solve that problem is to spin-off a second keyword-only shortener that somehow allows for tradability.
Assumptions
This argument rests on several assumptions:
1. Bit.ly will dominate the URL shortener market
This is really a baseless assumption that rests only the fact that I like bit.ly the best, they are the default shortener for Twitter, and bit.ly has approx $2m in the bank.Money = power, no?
2.Ubiquity = Credibility
This is how I first got turned on to Yelp. Every restaurant I searched had a Yelp result that would come up first or second for whatever I was searching. It was seemingly everywhere, so it gained my trust. The fact that I’m seeing bit.ly’s everywhere now is building serious trust in the brand. And I’m sure that’s completely intentional.
3.The number of letter/number combinations for URL shorteners is essentially limitless, the number of keywords is fixed/scarce.
This is true for any URL shortener - there are only so many good keywords to squat on. When you have a free product, you need seemingly limitless resources, otherwise you’ll attract arbitrageurs (and haven’t I always wanted the opportunity to call myself an arbitrageur).
Conclusion
Sure, this entire master scheme rests on the continued growth of Twitter, the move to real-time search, and the continued dominance of bit.ly as the link shortener of choice. But so?
And I know I’m not the only one scheming (check out bit.ly/cocacola)…
The presentation from Exit Strategy NYC at tonight’s New York Tech Meetup made me think about alternative ways to raise seed capital. When you’re raising money for your paradigm-shifting, world-changing startup, it can take a long time to build your product and simultaneously convince people with money that your team+product+company is worth funding. You want to meet the right investor, find the right “fit” etc etc etc etc. Months go by, and chip away at the time you’d normally spend building your product and - right - changing the world.
Enter Jonathan and Ashley Wegener. They took a real pain-point (have YOU ever gotten out at the wrong end of the platform in Union Square? Vom.) spent two months riding subway cars and making sweet Adobe Illustrator files and built a very cool iphone app that I have already shelled out $1.99 to download. Is Exit Strategy venture-backable? Nope. But I figure they’ll probably make around $100-$250K from selling this app to New Yorkers and tourists alike. I bet the whole process was about 3-4 months start to finish.
Now, they could spend the cash on boats and dinners and houses, or double-down and use the cash to build their “big vision”. They’ll probably make enough money from ExitStrategy to get through that painful product-development period without starving, they have already proven that they can execute, AND they have built a product that will make a lot of people’s lives just a little bit easier.
Stephen Marcus had an interesting piece on the New Atlantic Ventures blog (disclosure: I am currently a summer intern at NAV) about seed financing. After drilling down into institutional seed financing between January 2006 and June 2009 by region (New England, NYC, San Francisco, and DC - the four regions with the most VC money floating around) his data showed that while seed financing - which he defines as less than $1m - is down an insane 80.2% in Silicon Valley in the first six months of 2009 versus the same period in 2008, it’s up in both DC and NYC. See the graph for a better picture - it seems that the Valley and New England have put more capital toward larger rounds and have cut back on seed-stage deals.
Why the shift toward larger rounds? Safety. If a company is getting a $5m+ round of VC financing, chances are they are fairly established and therefore less of a risk (or rather, a different *type* of risk) for the investor. I see it as a knee-jerk reaction to the economic crisis - VCs were more inclined to put money toward more “proven” investments.
As a new admirer of the NYC startup scene, I’m happy to see New York (and DC as well) embracing seed financing - it only adds to the argument that Silicon Alley is booming once again.
The talk is called “The Art of Teaching Entrepreneurship and Innovation” (I know, how b-school of me!) and I was listening to it in podcast form on the train today. Really great talk by Tina Seeling, the executive director of the Stanford Technology Ventures Program. Got me thinking about the East Coast/West Coast separation in the way entrepreneurship is taught, which I’m sure has a direct relationship with the way businesses are built and the way investments are made.
What I wasn’t expecting, though, was about 40 minutes in when Fred Wilson said: “This holiday season there will be Boxee boxes in the stores. So you can go to the store and get a Boxee box and you can take it home and connect it to your TV and you’re done.” (Though he did say later that Boxee will not be making the boxes).
This is amazingly awesome news for Boxee (and for me!).
Why? I see at least 7 reasons (this list started out with 3 FYI):
1. Differentiation from other online video platforms
Outside of YouTube and Hulu, there are a myriad of other ways to consume video online and a whole truckload more in development. By making the link between the computer and the television, Boxee is taking a huge risk (would you really want to go up against Hulu, the MSOs and a whole host of other large corporations?), but the potential upside is significant. I think true differentiation in the video space is extremely difficult right now and this could be the key for Boxee.
2. The UI gap between television and the internet has become, well, HUGE
People who spend the majority of their time on the internet get this look of disgust on their faces when talking about the state of television. It’s not that the next best UI for TV isn’t out there - from what I can tell, TV Guide did such a great job locking in the cable providers and patenting everything related to guide technology (including a “claim for generating a simple EPG grid with channels on one axis and times on the other”) that the pace of innovation has slowed significantly.
This has created, in a way, a perfect storm for a product like Boxee: alienated users, a battle between giants that doesn’t really seem to be going anywhere, and an enormous market ripening itself for widespread change.
3. Nothing says “Recession: Game Over” like a holiday rush on Best Buy for the hottest new electronic toy
What’s the competition this year? Windows 7? Please. The economy is starting to bounce, and what better symbolizes a return to consumption than the long line outside electronics stores on Black Friday? (Circuit City R.I.P.).
I am pretty anti-widget when it comes to the future of television. I have no interest in seeing a sun in the corner of my screen when I’m watching Law and Order: SVU. I like Boxee’s app-driven model much better.
I know a lot of people are really into the Yahoo! widgets and there has been a lot of praise for the new Samsung TVs, but I’m not a huge fan.
The recent Boxee app development challenge is a great example of what can be done with the Boxee platform - photos, education, and news are just the beginning.
6. Boxee in its current state is too difficult to use with your TV and only sometimes compelling to use with your computer
Do I really use Boxee that much now? Nope. I love it, but for videos I find myself most often at Hulu, YouTube and Vimeo. The “pain point” is much sharper for television; online video is too slick and user-friendly, competition is vast and the video space in general is really crowded.
7. I am sick of paying for cable
Comcast, are you reading this? We’re breaking up. It pains me to pay $60/month so that I can scroll through those silly ads between every four listings in the guide software. I can’t stand staring at my remote and wondering what to do with all those buttons that I never seem to use. Anecdotally, it seems like the early adopter crowd is fed up and starting to unplug en masse. Here’s my guess on how the rest of the demo groups will shake out:
NOW - Early Adopters - Currently hacking together solutions that for the most part involve Mac Minis
1-3 Years - College Students - What do all dorm rooms have? Internet Access. Probably wireless. Cable TV is a pain in dorms, and colleges would love an IP solution that could just use the existing wireless
1-3 Years - Yuppies - The ones who always have to have the “latest and greatest”
4-6 Years - Moms - Once word gets out that you can look at baby photos through Flickr on your TV? Forget it.
5-7 Years - Everyone Else - Yeah, five years is a long time, but the MSOs are huge and the TV world moves slower than the internet.
Anyway, here’s hoping the Boxee set-top rumors will pan out this holiday season.
I'm Amanda Peyton. I am an MBA student at MIT Sloan and this is my blog about startups, technology, entrepreneurship, business school and "other". For more about me visit http://amandapeyton.com.
