Today we (=Outbrain) announced the acquisition of Surphace from AOL. This is a big step for us, and obviously - its our first acquisition ever. I've been wanting to do this for quite a while, but now finally all the pieces fell in place and we could get the acquisition deal done.
I've already heard a bunch of speculations on why we did this deal, but at the end of the day it's fairly simple and straightforward. Our mission with Outbrain is to present as many readers with links to interesting content. We see this as an important thing to do for de-polluting the web from all the crappy interruption advertising we see all over the place (and obviously we believe this is good business too!... :-). Our service has proved itself on practically every publisher that has used it to date, and so now is the time to deploy it on a much bigger scale and improve the user experience for many new readers.
I wrote about the specific reasons we acquired Surphace here. Ultimately, it's about establishing a clear leader in the content discovery space, and providing a better service to readers and our partner publishers.
Google killed Wave yesterday, and I think there are a few lessons we entrepreneurs can take away from it:
Focus on doing one thing great (MVP) - Wave was a classic engineering-driven product, full of features and things it can do. One of the most dangerous, silent killers of many startups is developing product features just because you can, or just because it's easy for the engineers ("lets do it - it will only take 1 day to develop"). Each specific feature seems benign on its own, but when cobbled together, cancer starts to spread in a few forms:
The product becomes less "crisp" - the biggest challenge you're going to have as an entrepreneur is in selling a crisp product story to a very clear buyer. By layering more 'just-because-we-can' features onto your product, you are going to lose the crispiness of what's that single thing that your product does better than anyone else in the world.
Maintenance becomes a nightmare - those little harmless features you add might cost very little now, but are going to cost you dearly in the future as you scale. They cost is customer support, in code complexity, in multiplying future QA efforts, etc, etc.
So my tip would be to think about "just-because-we-can" features as if they were a cancer you should avoid developing at any cost. And if you slipped and developed one - don't hesitate to kill it and reduce your feature set. Google Wave tried to do too many things, and lost its product crsipyness in the process.
Don't think of your product as an X-killer - When Wave was launched it was hyped to death as the email-killer. The Googlers who developed Wave kept saying how outdated email was, and how it was not designed for the current world we live in and how Wave would replace all that. Wave didn't stand a chance as an email-killer. But I think it could have been a great team collaboration tool within companies. Problem is - that probably didn't seem like an exciting, big enough goal to take on and so it was positioned as an email-killer. Focusing on being the killer of something is almost surely going to distract you and take down the wrong product roadmap. All the "Google killer" search engines, or "Facebook killer" social networks, are much more likely to be killed themselves than even scratch those they're after.
Avoid big bang, hyped launches - I might be wrong on this - just my personal 2c... please take with a grain of salt. I'm allergic to hyped up product launches - I think they are extremely dangerous for startups. A hyped launch usually has minimal long-term value -- it's like a Digg storm hitting your site and leaving immediately -- yet it sets unrealistic expectations for users, employees and investors alike. A hyped launch is almost guaranteed to follow with a big disappointing drop to a more realistic attention level, which can be devastating for a startup. My personal 2c:
If you can void hype - avoid it like the plague. Just focus on, and celebrate, smaller wins - WoW or MoM growth on your core important metrics. It's a longer road, but a much healthier and more sustainable one.
If hype hit you - get in the bunker and IGNORE it. Tell everyone involved in the company - employees, investors, etc - to enjoy the day of hype for 2 minutes, and then get back to work and ignore it. Ignore it in the reports. Ignore it in any way you can. If you start believing the hype - you are likely on route to being doomed.
Lastly, and very importantly - You can beat Google at your game! -Google does a lot of things right but they're not beyond competition or failure. As a startup it may seem like they have all the advantages over you - money, lots of smart engineers, brand, etc, etc. But believe me - if you apply some 'Moneyball thinking' (highly recommend every entrepreneur read this book) - you'll realize that as a startup you have so much unfair advantage against the BigCo's of the world that it's not even funny. Namely - you can afford to start working on much smaller, crisper bites which are too small for a BigCo to be interested in, but be the best at them in the world.
Blekko is soon opening its new search engine, and getting some good coverage. Microsoft's Bing is spending hundreds of millions (billions?) trying to dog chase Google in search. Countless companies tried competing in search before - Cuil, Wolfram Alpha, etc.
It would be fantastic for the internet to have a real #2 player in this space, but unfortunately I'm afraid none of these efforts will be a real contender to Google in the long run, and not because they fall short on product quality. In fact, most of these products (and Bing is the best example) offer a far superior experience to Google's in many ways.
But search is a strange category to compete in. I think it has a special dynamic to it -- sort of a weird variation on the "Innovator's Dilemma" -- that makes it so tricky to take any meaningful market share from Google...
The Search Innovator's Dilemma
The trouble is that search companies (and reviewers) evaluate new search engines based on what they do well. Bing does travel search great (as well as images, and many other categories), Wolfram does data-intensive search great, Blekko apparently does vertical search great, etc, etc. It's common wisdom to focus on the things you do well, and do them better than anyone else in the world. But what works well for mostly any other category of company in the world is, I think, precisely the achilles heel of all non-Google search engines.
Because users, subconsciously, place less value on the queries a search engine handles exceptionally well, than they do on queries the search engine doesn't. In other words - a great search result for a travel query on Bing will matter less to users than getting no good results on a query for say "italian vespa collection poster" (compare to Google...)
Google might lose in the areas where its competition shines, but it doesn't matter. Our habits as users don't form there... they form on those multiple-keyword, 1-off, "non-important" queries, and that's where Google absolutely kills its competition.
Hence the 'Search Innovator's Dilemma'... to win search market share from Google, it hardly matters to one-up Google on quality, or UI, in any specific type of search. The search habits don't form there. Where you'd need to focus is on consistently delivering OK results on all those billions of queries that "don't matter", and that's a task that, it seems, is nearly impossible for a company to take on.
Flipboard launched this week with levels of hype not seen since Wolfram Alpha or Google Wave (coverage by Scoble, AllThingsD, etc).
I installed it on the iPad, and like it - very well done app indeed. But I'm a bit skeptical about how revolutionary this will actually turn out to be. After the crazy hype goes away, I think people will realize this is a little less useful than it first seems. Here are two reasons why:
Duplication - Flipboard is a content aggregator, and aggregators are only useful if they make you stop using the sources they aggregate. A good example (at the time) were RSS readers like Bloglines or Google Reader - if you used those, there was no reason to visit the actual websites of the blogs you subscribed to on your RSS reader. The RSS reader became a much more efficient interface to consuming those blogs. But if the aggregator does *not* completely replace your access to the aggregated sources (as I suspect will be the case with Flipboard), you start running into an annoying duplication issue which seriously deteriorates your user experience. This is exactly why FriendFeed had no chance in becoming a mainstream success (IMHO). So while Flipboard offers a very nice UI to consuming content shared on Twitter and Facebook, I doubt that many people will actually abandon those services and stop checking their streams. Flipboard is a nice UI, but not a sufficient replacement. And in the long run I think that's going to be it's weakest spot.
Copyright - bear with me on this, because it will eventually get back to user experience. From what I can tell, Flipboard will be running into copyright issues with the owners of the content it aggregates. They are scraping a significant amount of that content, sans-advertising. I suspect many publishers are not going to like this eventually. Now you could claim that this is not different from any other RSS aggregator that ever existed, and they had no issue with content owners. But the difference is going to be in advertising. RSS readers have always been in the twilight zone of copyright, and never caused too much debate because none of the major ones placed advertising along the content. So content owners could see the value of getting some exposure and traffic from the RSS reader, yet didn't feel threatened by them monetizing the content via ads. Flipboard will likely be different - the app is free, and I suspect their long-term business model is to introduce advertising into the magazine/app. They may be able to pull that off if the usage is low. But if they become very successful AND place advertising - they will have the best publishers blocking their content from being pulled into Flipboard. And that's where it gets back to the user experience... the quality of the content on Flipboard will be limited to blogs that are not publishing as a business.
I'm not betting against the company here... Again - the app is very well done, and they have a fantastic team (both the entrepreneurs and investors) so I'm sure they'll pivot their way to a solid path. But I seriously doubt that this will revolutionize the way we consume content as all the hype this week seems to suggest.
I recently had the pleasure of hearing Dan Senor, author of Startup Nation, at the most recent TechAviv meetup. I just bought 10 copies of the book, and will be giving them away to 10 Outbrain customers. More details on that below.
Yaron Samid did a great job describing what Startup Nation is about:
"...the book asks and answers the question; How is it that a nation only 60 years old, 7 million people strong (smaller than New Jersey), literally surrounded by enemies, in a constant state of war since its founding and with no natural resources, has:
Highest concentration of startups in the world
Most VC investments per capita in the world
More NASDAQ listed companies than any country besides the US, more than all of Europe, India, China and Japan combined
Economy barely hit by global economic crisis
In short, how do we kick ass with such little feet? The book and its answers are particularly timely for a world struggling out of a global economic crisis. Most agree that there’s only one way out; Innovation, and Israel is its hotbed..."
If you're interested in the book, and want to help get more people to read it by pushing it to the Amazon Best Seller list, go ahead and buy your copy here.
Or, if you want a better deal, I will be giving away 10 copies of the book to the first 10 people who submit a link to Outbrain's sponsored link service - Outloud. With Outloud you can amplify an article or blog post of your choice on our network of thousands of sites and newspapers (including USA Today, Slate, Fox, Tribune, Golf.com, SportingNews, etc, etc). The cost is only $10/month for each story you choose to submit, and there is no long term commitment. You can promote any story you want to on the web - it could be about your company, a blog post you wrote, or a great article about a cause you'd like to support. Hey - you can even help get the word about Startup Nation out to more people by sponsoring this article on Newsweek!
All you need to do is go to Outloud, submit your story, and let me know (either by Twitter, or on a comment here, or shoot me an email to galai[at]outbrain[dot]com). The first 10 people to do this will get a copy of the book (which, btw, sells at book stores for $27, not including the shipping... so you'd get over $40 in value for a $10 investment, and help promote a great book in the process).
In the mean time, here's a short interview with Dan Senor, author of the book:
Today we (=Outbrain) are announcing the launch of our sponsored link program called Outloud. Outbrain now powers the recommended/related article links ("People who liked this article also liked these:") on thousands of blogs and newspapers including USA Today, Slate, Fox, Tribune, Golf.com and SportingNews.
Using Outloud, companies and bloggers can now submit links to stories into our index. We then show links to those stories on the most relevant pages in our network. The cost is a flat $10-per-month for each story you choose to submit via Outloud. There is no long-term commitments or anything like that, so this is practically risk-free.
Here are a few examples of what Outloud is perfect for:
Amplifying earned media - Having bloggers write an authentic, positive review of your company or product is one of the most powerful endorsements you could ever hope for. But once that blog post is written - how many people actually read it? How do you get more, interested people to read those reviews? With Outloud you can submit links to authentic reviews of your company or product, and we'll show them to people who are actively reading related content.
Amplifying PR - Similarly, PR folks are focused on getting press and blog coverage for their clients. But once your client gets the PR, how can you maximize its effect. For $10/month on Outloud you can amplify great press coverage and get many more people to hear about it.
Getting new readers - If you're a blogger looking to get new readers exposed to your content, Outloud is a great and affordable way to do it. Choose the 5-10 stories on your blog which you think are best, and submit them to Outloud for $10/month each. We will then show your links on the most relevant pages in out network of thousands of blogs and newspapers.
The idea around Outloud is simple - we want to be able to show the best sponsored links possible on each page using our service. And to do that, we don't want you thinking twice of whether you should or shouldn't be submitting stories to Outloud - we've reduced the price barrier to the lowest reasonably possible.
The links you submit can be on your own blog, or on any other website in the world. If Walt Mossberg covered your company on WSJ, you are more than welcome to submit that link to Outloud as well. In fact, we think that the best links to submit would be authentic stories writen about you by other people.
But what we do insist on is that all links in Outloud be pointing to interesting, real content. We will be gladly rejecting any links to spam, scams, non-disclosed self-promotions, fake content, splogs, etc. Outbrain has always been about providing readers with the most interesting and relevant links, and we plan to continue doing so whether the links are free or sponsored.
Here's an example of how Outloud links might look on a site using our service:
I'll be speaking at two events in the next couple of weeks:
The Israeli Business Forum of New York (IBF) is an apolitical, nonprofit organization facilitating quality business discussions among Israeli professionals in New York. I'll be speaking there on Tuesday, July 28th at 6:30pm. Details and registration here.
On Wednesday, July 22nd, I'll be speaking on a panel at an event benefiting Rabin Medical Center in Israel. Registration is here.
With me on the panel will be Joel Naroff – Chief Economist of TD Bank and Dr. Lindsay Rosenwald – Founder of Paramount BioCapital. Cost is $75, and it all goes to benefit the new emergency and trauma center at Rabin Medical Center.
I am sick and tired of all this swine flu craziness. Does anyone remember the last pandemics which were going to wipe out humanity? - avian flu, SARS, ebola, anthrax, etc... Where did they all go?! And hey - weren't we all supposed to have been mad cows by now?!?
I want to suggest a new formula for evaluating the real risk of pandemics like the swine flu:
# of infected people / $$'s made by the media
Anyone out there have the numbers re swine flu? Regular flu? Bee stings? Fire ant attacks?
Based on my proposed formula, I bet swine flu is probably one of the safest and mildest diseases in the world.
Globes published today an obnoxious article (Hebrew) about Better Place - Shai Agassi's electric car venture. From the first word through the last, it was clearly setup as a hit-job by a clueless nobody "journalist" who has obviously never tried to accomplish anything meaningful in her life.
Disclosures: I'm not an expert on the subject matter. I'm not very familiar with the company. I've never met or spoken with Shai Agassi, and have no other connections I'm aware of with his company.
The "article" attacks Better Place for failing to deliver on a variety of milestones that the "journalist" had apparently expected them to. For example, they did not yet start manufacturing cars or employing 50,000 people in Israel after less than two years since the company was founded. The writer of course has started multiple successful companies, and has extensive experience in building factories within months....
This seems to have been going on for a while now - On the one hand Better Place has gotten some incredible press, and on the other hand "journalists" ripping apart Shai and the company, as if they owed them or the public anything (they don't...). It's sad to see this kind of hit-job journalism which is designed to do nothing more than sell a few more copies of the newspapers. The cost of hit-jobs by mediocre writers is much cheaper than actual journalistic work by journalists. And unfortunately, tabloid crap like this sells newspapers...
So as an FYI to Ms. Shlomit Lan - startups in general, and specifically one as ambitious as Better Place, take years or decades to build. During those years, as long as it's a law-abiding, private company, it owes *nothing* to the public as it relates to timelines, milestones, business models, pricing, etc, etc. Building a great company is never as simple or quick as it seems, and if they figure out half of the challenges they currently face in say 5 years, that will be an incredible achievement. Passing this kind of judgment on the company so early in the game proves you're either clueless, or jealous, or you've intentionally setup a hit-job.
A couple of years ago I attended a conference where Yossi Vardi was part of a panel judging startups. After passing criticism to a couple of the entrepreneurs, Yossi stopped the conference, took the microphone, and said he has something critically important to remind all the judges, journalists and investors dealing with entrepreneurs. He quoted Theodore Roosevelt's 1910 speech (also covered by TechCrunch here):
"It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat."
Shai Aggasi is the man in the arena. He might fail miserably, but he will do so while daring to make great things happen.
I know too little to determine whether Better Place is good for the environment or bad (I suspect it's a pretty good alternative to buying oil to fund the bad guys and burn it to destroy the world...). I simply dread the day that "journalists" kill innovation and innovators by abusing their power to run hit jobs like this on the men in the arena. Therefore I had to respond.
Finally - to anyone who is genuinely interested in this project, I highly recommend this hugely inspiring talk that Shai Agassi recently gave at TED:
~~This is my personal blog, and any opinions expressed herein are mine and mine alone. Quigo and outbrain, my employers, are not responsible for anything I write, comments posted, or anything else in Web X.0 blog.
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