Uber-Entrepreneur Jack Dorsey To Startups: Don’t Just Disrupt, Start A Revolution

Image representing Jack Dorsey as depicted in ...

Image via CrunchBase

From my Forbes.com blog The New Persuaders:

Jack Dorsey is a latter-day legend among entrepreneurs, and no wonder. Not only did he help found Twitter, where he serves as executive chairman and head of product development, but he’s also founder and CEO of Square, which is trying to foment a revolution in payments by allowing people to use their mobile devices as wallets.

Revolution, in fact, not simply disruption of the existing way of doing things, was Dorsey’s main message in a keynote talk this morning at TechCrunch Disrupt, a startup tech conference in San Francisco. “We need to change the name of this conference,” he told thousands of attendees hanging on his every word. Here’s a sampling of what he had to say, mostly aimed at dashing precious beliefs of entrepreneurs:

I never wanted to be an entrepreneur. I never woke up one morning and thought I need to get a ticket to San Francisco. I actually wanted to be Bruce Lee.

Actually I wanted to be a sailor, to explore the world. I wanted to be a tailor, to build things myself that I could share with other. I wanted to be an artist, specificallly a surrealist.

Along the way, I realized life really happens at intersections. Literally for me. I was fascinated by cities.

I thought about founders–in particular the Founding Fathers of the United States. They realized they wouldn’t get everything right at the start. There would not be one founding moment but many. A lot of the ideas they had at the time were wrong (slavery, for example, or women’s suffrage).

So there’s a massive amount of energy spent on the founding moment. At Twitter, not so. Companies have multiple founding moments. I consider CEO Dick Costolo a founder. He’s really reconsidered everything and made the company better. Same at Square with its COO. Same at Starbucks with Howard Schultz, who was not a founder. Marissa Mayer, not a founder of Google or Yahoo, but with the drive and smarts to create another founding moment at Yahoo.

So a founder is not a job, it’s a role. An idea that can change the course of the company can come from anywhere.

Science fiction writer William Gibson said the future has already arrived, it’s just not evenly distributed yet. Our job is to distribute the future that is already here. We need to make sure it spreads all over the world, as quickly as possible, and with the right values.

We have the change the name of this conference. What we really want is not disruption, but revolution. It pushes people to do the right thing. It doesn’t always have to be loud or violent. It’s just as powerful in its stillness.

So the key is how we recognize disruption. We want to distribute the future more quickly. We don’t want to just disrupt things and move them around. We want purpose. …

Read the complete post at The New Persuaders.

Next-Generation Venture Capitalist Ben Horowitz On How To Build A Company Today

PandoMonthly - June 2012 - Sarah Lacy intervie...

Photo: thekenyeung

From my Forbes.com blog The New Persuaders:

Few venture capital firms have been more aggressive in recent years than Andreessen Horowitz, which has invested in dozens of the hottest companies from Facebook to Groupon to Pinterest. It has become one of the largest VC firms in just the three years since it was formed by onetime Netscape cofounder Marc Andreessen and his longtime partner Ben Horowitz, former CEO of Andreessen’s company’s LoudCloud, later sold as Opsware to Hewlett-Packard for $1.6 billion.

Today at the TechCrunch Disrupt conference in San Francisco, one of the year’s largest conferences for tech entrepreneurs (streaming live here), Horowitz was interviewed by legendary Silicon Valley VC and adviser Bill Campbell, known in these parts at “Coach.” Here, paraphrased at times, is what Horowitz had to say about how best to build a company today:

Q: What do you mean by “Software eats the world” as your basic investment thesis?

A: Weak form: Software is eating the technology industry. The stronger form of the hypothesis is that software will eat every industry eventually. Retail, movies, radio and music. We see software eating every industry from agriculture to finance.

Historically, the technology industry has been sized at a certain size. Only so much new technology could be absorbed. But as software eats other industries, technology will actually expand.

Q: Apple defies some part of that with software and hardware integration. How do they do that?

A: Increasingly, such as with Amazon, it’s software, hardware, and content.

Q: Why did you go over to the dark side–venture capital?

A: I’m considered a much better CEO now that I was when I was a CEO. Venture capital had become too abstract when it came to building a business–it was about business models. When you’re building a business, it’s about the struggle and the horror. I thought it would be good to have a firm that knew how to actually build a company. …

Read the complete post at The New Persuaders.

Why Investors Love Yelp Even As They Hate Other Social Stocks

Image representing Yelp as depicted in CrunchBase

Image via CrunchBase

From my Forbes.com blog The New Persuaders:

Unlike those other two little social media companies whose disappointing second-quarter reports last week knocked their shares to all-time lows, Yelp today wowed investors with better-than-expected second-quarter earnings and outlook for the rest of the year. After falling almost 6% today to $18.82, shares in the local business reviews site have rocketed up in after-hours trading by 14%.

Needless to say, a good quarter and outlook both help, but there’s more behind investors’ enthusiasm about Yelp versus Facebook and Zynga. They perceive some key positive fundamentals, too:

* Reviews of local businesses present a clear, understandable opportunity for advertising, and local advertising is a nut that no one online has yet cracked the way the Yellow Pages did in phone books. Yelp’s reviews provide a prime place for this advertising to appear. Local advertising rose 89% in the quarter. Meantime, fairly or not, both investors and advertisers still aren’t sure about Facebook’s and Zynga’s business models.

* Yelp has network effects in its favor, since the more reviews it gets (up 54% from a year ago, to 30 million), the more businesses are likely to create Yelp pages and advertise, in a self-reinforcing cycle. Active local business accounts rose 113% from a year ago, to 32,000. …

Read the complete post at The New Persuaders.

Job One For Yahoo CEO Marissa Mayer: The Vision Thing

Marissa Mayer

Marissa Mayer (Photo credit: jdlasica)

Cross-posted from my Forbes.com blog The New Persuaders:

Everybody has all kinds of advice for Yahoo’s new CEO, Marissa MayerHire great engineers. (Well, duh, but how? Big money alone won’t do it.)  Fire 10,000 people. (Sure, Marc, easy peasy–that should help with recruiting too.) Fix Flickr. (Right, and 47 other services while you’re at it.) Go mobile. (Years late, that should work.)

Granted, most of those things may well be necessary at some point, and probably soon. But here’s what everyone from employees and advertisers to users and investors needs to know first: What is Yahoo?

It’s a question that has produced unconvincing answers for so many years it’s hard to remember by now what made Yahoo unique. Yahoo itself takes a direct crack at it on its “Investors FAQs” page, answering the very same question, “What is Yahoo!?”:

“Today, Yahoo! Inc. has become the world’s largest global online network of integrated services with more than 500 million users worldwide.”

Ugh. “Digital media company”? Makes my heart, uh, flatline.

It also has an actual “mission or vision statement,” a clear carryover from Carol Bartz, two CEOs ago:

“Yahoo! is the premier digital media company. Yahoo! creates deeply personal digital experiences that keep more than half a billion people connected to what matters most to them, across devices and around the globe. That’s how we deliver your world, your way. And Yahoo!’s unique combination of Science + Art + Scale connects advertisers to the consumers who build their businesses.”

A little better, but really, “Science + Art + Scale”? Hard to imagine that means much to advertisers, let alone consumers. (I was always surprised Bartz didn’t call it Art + Science + Scale to provide a more characteristically salty acronym.)

Still, there’s a kernel of something in the part about keeping people connected to what matters to them. I will hazard an unpopular view that Yahoo’s original mission as a portal still has fundamental appeal to many people. Most digerati will say the portal is dead, and good riddance, as people flock to more focused services such as Facebook’s social network and Google’s search engine. So if Yahoo comes out and says it’s a portal, it will become even more of a laughingstock in the tech community.

But even Google and Facebook increasingly are becoming hubs for all kinds of activities, even if they will never utter the P word. So it seems clear that a very large number of people out there want someone else to help them decide the best services and apps to use online–and provide a way for them to work together and share data in ways that are useful to us, not just advertisers. It’s also clear that many people are leery, thanks to privacy concerns or simply because they may miss the latest and greatest from that new upstart, about going all-in on Google or Facebook or even Apple.

At its heart, Yahoo’s value, when it has had value, is providing people easy, curated access to the best online services out there, whether they’re Yahoo’s own or others’. That’s a media company, however that’s evolving today and will continue to evolve in the future.

Of course, a vision only works if you act on it, so ultimately, what will really matter is creating new services people can’t live without. Those are now few and far between at Yahoo, though a few like Sports and Finance come pretty close. Spurring the creation and execution of new ones is where Mayer could shine where her predecessors did not.

But Mayer’s vision needs to acknowledge that Yahoo’s future can’t simply rest on pumping out cool products. It needs to be more meta than that in an era when only a couple behemoths can even think about providing everything on their own (and even Google has throttled back its habit of throwing stuff against the wall to see what sticks). And dozens of smaller companies are providing best-of-breed services that Yahoo will be hard-pressed to compete with.

The way Yahoo becomes a 21st century media company, a concierge of online services, needs to be fundamentally redesigned for the mobile era, of course. I still use MyYahoo a lot because I’ve populated it with stock lists, key news sources, access to email accounts, quick views into other services such as Twitter and Facebook, and more. But the desktop version is a fright on my mobile phone, and the mobile version is simply a long list of seemingly random feeds.

Yahoo, of all companies–the one that famously kept its home page simple enough early on that it wouldn’t take more than a few seconds to load on slow dial-up connections–should be able to figure this out. Even Apple, with the random scattering of apps across multiple pages on its iPhone, hasn’t figured it out. But I’d love to see it, and I and a few hundred million other people wouldn’t mind getting it from Yahoo.

For her part, Mayer provided a provisional vision of what Yahoo is or should be to the New York Times: “My focus at Google has been to deliver great end-user experiences, to delight and inspire our end users. That is what I plan to do at Yahoo, give the end user something valuable and delightful that makes them want to come to Yahoo every day.”

But that “something” is far too diffuse, and surely she knows that. As a former product chief at Google, Mayer may face a challenge doing the vision thing. She needs an elevator pitch, yes, but more than that: She must make a clear, bold statement of why we should continue to type Y-a-h-o-o into our browsers, or install Yahoo apps on our smartphones.

Move Over, PayPal Mafia. Meet The Google Mafia

From my Forbes.com blog The New Persuaders:

PayPal, the online payments company that eBay bought in 2002, is legendary in Silicon Valley for spawning an incredibly talented group of founders, investors, and executives at startups that read like a Who’s Who of Web success stories. The so-called PayPal Mafia includes Tesla and SpaceX founder Elon Musk, LinkedIn cofounder, angel investor and Greylock VC partner Reid Hoffman, hedge fund and early-stage investor Peter Thiel, Yelp cofounder and CEO Jeremy Stoppelman, YouTube cofounders Chad Hurley and Steve Chen, and many more.

Now, it looks like a new corporate organization is moving in: the Google Mafia. With the surprise appointment today of longtime Google executive Marissa Mayer as CEO of Yahoo, it now appears that the Google Mafia could prove almost as powerful, though in a different way: It’s more of an executive mafia than a startup mafia. But these former Googlers are now in high-profile positions around the Valley and the larger tech industry, in very influential companies. …

Read the complete post at The New Persuaders.

What Google Veteran Marissa Mayer Can Do As Yahoo’s New CEO

Marissa Mayer

Marissa Mayer (Photo credit: Wikipedia)

From my Forbes.com blog The New Persuaders:

In a surprise move widely viewed as a coup, struggling Yahoo has just appointed Marissa Mayer, a highly visible longtime executive at Google, to be its new chief executive. The appointment, initially announced through a New York Times story, now has been announced officially.

Mayer, who for years ran Google’s search products after joining as employee No. 20 13 years ago, more recently had moved to head its local business efforts. But last year, Jeff Huber was appointed senior VP of local and commerce, seemingly a management level above Mayer, though Google tried to say the move wasn’t a demotion.

Mayer, 37, wasn’t mentioned as a possible Yahoo CEO successor to Scott Thompson, ousted in May after revelations about a falsified resume. Instead, it was becoming more likely that interim CEO Ross Levinsohn would step up to the permanent post, if any CEO job at Yahoo, which has run through multiple CEOs in recent years, can be said to be permanent. On the other hand, delays in the decision indicated the board wasn’t going with the seemingly easy choice.

In an interview with Andrew Ross Sorkin of the New York Times’ Dealbook column, Mayer said that despite “an amazing time at Google” for the last 13 years, the decision to take the top spot at Yahoo was “relatively easy” because it’s “one of the best brands on the Internet.”

The job will be a big challenge for Mayer, as it would be for anyone, because Yahoo has been losing ground on virtually every measure, with sales flat or down for years. What’s more, there has been a steady exodus of talent as Yahoo changed direction and leadership multiple times in recent years and laid off thousands of workers.

Mayer faces an additional challenge because she has never run a company, let alone a large one that’s essentially fighting for its life vs. runaway competitors such as Google, Facebook, and even Twitter. Even more important, perhaps, though she was apparently moved over to Google’s local efforts to revive them, she hasn’t faced a true turnaround situation before. She could face a skeptical reception from investors, analysts, and especially Yahoo employees, who have seen two other outsider CEOs, Thompson and Carol Bartz, depart without making any headway. …

On paper, a charismatic product chief from the company largely responsible for Yahoo’s decline as an online advertising powerhouse looks like just what the Web pioneer needs. But her success now will depend not on what she has done in the past at the world’s most successful Internet company but what she can do next at the least successful one.

Read the complete post at The New Persuaders.

Yahoo, Facebook Kiss And Make Up, Ending Crazy Patent War

From my Forbes.com blog The New Persuaders:

Ending one of the more bizarre spats in Silicon Valley lately, Yahoo and Facebook have settled their patent disputeYahoo had sued Facebook back in March, alleging the social network infringed on 10 Yahoo patents concerning advertising and social networking itself.

The suit had turned much of Silicon Valley against Yahoo, since the suit seemed so clearly timed to force soon-to-go-public Facebook into coughing up a big cash or stock settlement. But the move backfired, as Facebook then not only spent big bucks to buy its own patent trove, it countersued Yahoo. Not long afterward, Yahoo’s then-CEO Scott Thompson, whom some has said was a driver of the suit, left under a cloud thanks to apparent doctoring of his resume. In early June, negotiations began between the two companies to end the fight.

How dumb an idea was Yahoo’s decision to sue one of the most powerful and influential companies in technology today, one that had been a partner up to then? So dumb that the settlement doesn’t include monetary considerations to Yahoo at all, beyond a vague promise to work together more closely in the future….

Read the complete post at The New Persuaders.

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