I have a great idea for a Web 2.0 start-up. Let’s raise $40 million from top name VCs to do a start-up to allow 15-year-old girls make slideshows! Let’s recruit top engineering talent and have our founding team include really smart people like Max Levchin of Paypal fame.

It’s comical that no one seems to notice the elephant in the room with regards to worthless start-ups like RockYou and Slide. RockYou has $16.5 MM over two rounds from heavy hitters like Sequoia and LightSpeed. Slide has raised well over $15 MM over three rounds from folks like Khosla Ventures and The Founders Fund (Peter Thiel is a former co-founder of Paypal where Max Levchin, CEO of Slide, worked).

More then the majority of traffic from sites such as these are from MySpace or Facebook, what happens when social network sites shut you out? I’m not saying they won’t get traffic, or new streams of users from elsewhere, but the bulk of these all stem from teenages creating slideshows and you making money off the back of them!

We’ll see how long the bigger network sites allow third-party applications such as these to run, why would they want users signing up for external / competing websites, they will shift more towards creating their own widgets inhouse, and keep all traffic for themselves, thus killing off anything like this.

Move on.

A great way to make people think you’re important is to say, “Don’t send me email, I can’t answer it.” The truth is that these people are retarded. If you’re important, you can hire someone to help you sort through your mail. If you’re just a retard and a loser, you don’t get that much real email (e.g. not spam, not invitations to join Tagged or some other spammy social network, and not Facebook notifications) and you don’t have enough money to hire someone to read your email. 99.9999% of us realize that we’re normal human beings, and we go on with our lives answering our own email.

The other 0.0001% claim they can’t. The horror! They usually live in California and think quite a lot of themselves. They are probably obsessed with Facebook and Twitter and will soon claim that they can’t even respond to Facebook messages or Twitter twits or whatever dumb name Twitter users have for their farts.

The only person who gets a free pass is VC Fred Wilson.  Not because anyone here plans to raise money from his firm (heck, to raise money from his crazy firm you need to have no business plan, no desire to make money, and a desire to dress like Ev Williams and look like a tool shed), but because he at least is someone who can claim to get a lot of emails and maybe his blog is evidence to that fact.

And for this reason I have a hot tip, either hire someone that can do the work for you, stop making a tool out of yourselves or simply use a neat site over at http://www.cocomment.com

 

What is Dopplr?

“Dopplr is an online service for frequent travelers. It was created
by an international team of world travelers. We saw a need for this
kind of service, but discovered that no one was offering it. So we
did it ourselves, and are delighted that other people are liking it
as much as we do.”

The basic concept of Dopplr is that it allows frequent travelers to
share future travel plans with friends and colleagues. It also
reminds you of friends and colleagues who live in the cities you’re
planning to visit. According to the web site itself, if you travel
more than five times a year and have friends who do as well, then
Dopplr is for you.

-How did Dopplr get started?

Dopplr, which was founded in 2007, began as a tool for a small number
of friends who spent a lot of time on the road.  As the number of
people who were interested in the web site grew, the founders decided
that it was time to begin expanding the web site and eventually open
it to the general public.  Although the web site is currently in
private beta, it is slowly moving towards becoming available to the
general public.  According to TechCrunch, although Dopplr is not yet
open to the public, the company claims that Dopplr’s users have
already shared 110 million kilometers (70 million miles) of trips to
over 2000 cities around the world.

-Who created Dopplr?

Although the web site only states that Dopplr was created by an
international team of world travelers, according to the Guardian
Unlimited, Dopplr has three main founders.  The main founder of the
web site is aFinnish designer named Marko Ahtisaari, while the other
founders include Matt Jones and Matt Biddulph (both former employees
of the BBC).  Dopplr currently has a staff consisting of five members.

-How much funding has Dopplr received?

Although the amount has not been disclosed, Dopplr announced on
September 4th, 2007 that it had received early-stage financing from
Martin Varsavsky, Joichi Ito, Reid Hoffman and The Accelerator Group
led by Saul Klein.  According to the official Dopplr blog, these
companies have made investments in other successful internet
companies, including Last.fm, Joost, FON, LinkedIn, Flickr,
Technorati, Wikia, Xing, Stardoll, Six Apart and Netvibes.

-What are the key features of Dopplr?

According to the official Dopplr about page, the web site offers the
following main features:

Add Trips: Each time you travel, you can easily add the trip to your
Dopplr account.

Find Colleagues or Friends Using Dopplr: Like most social networks,
Dopplr has a built-in search function.  Once you find the person you
are looking for, you can make that person a “fellow traveler.”

See the Trips of People You Know: If your friends would like you to
see their travels, they can easily invite you to do so(and you can
also easily invite them to see your travels).

Be Notified When a Colleague of Friend Visits Your City: By clicking
on your home city, you can easily see when your colleagues and
friends are visiting your city (and Dopplr will also show you if you
will be out of town during that time).

-Does Dopplr have any competitors?

Currently, Dopplr does not have direct competitors.  However, this
does not mean that they do not have to worry about competition from
other sources.  One of the main criticisms of Dopplr is that it could
easily be “a single feature of a social network.”  For example,
something similar to Dopplr could be fairly easily created as a
Facebook application.  In the worst case scenario for Dopplr, their
entire concept could be replicated and integrated into an entire
social network like LinkedIn.

-How much traffic does Dopplr receive?
Even though it is still in private beta, Dopplr’s traffic has grown
significantly over the past four months.  Traffic estimates show that
Dopplr received less than one thousand visitors in June, but received
over thirty-five thousand in September.

(Note to all of you: If it’s free, expect what a free service delivers.  This means that you shouldn’t expect 99.999% uptime.  You shouldn’t expect maturity.  You shouldn’t expect strong privacy policies or even a business plan.)

2. Sure we may have more startups but it doesn’t mean they are any more useful.  For all of Paul Graham’s “do good for the world” b.s. and the generally left-wing mind displayed by the Y-Bombs, you’d think they’d launch startups that actually have a positive impact on the world.  What positive impact does an inane dating site have?  What about another lame social news aggregation site in a virtual world for grandmothers who own dogs?  Nada.  Please solve a problem that actually exists or matters to more than 1 person outside Silicon Valley who does not read news.yc.

3. Standardized acquisitions are bullshit.  This is another example of how Paul Graham is extremely self serving.  Rather than using logic that leads to a conclusion, he reaches a conclusion and then tries to back into the logic.  It’s a sad example of a Harvard education gone to waste.  Rather than saying “hey I thought of all this stuff and decided to start Y-Combinator” he runs Y-Combinator and writes this pathetic essay to convince people that he’s the messiah.  This essay proves that he’s a shill.  Paul - you can pull the wool over the eyes of the average 25-year old geek.  Congratulations.  That’s like selling legal help to Vonage.

4.  Founders will get younger but not nerdier.  Yes, Y-Combinator attracts the types who struggle to put on a tie.  The internet does lower barriers to those of us with fewer personal connections and with lower levels of charisma.  That being said, the flip side of Paul’s argument is that startups are getting easy.  When every founder is really nerdy, the nerdiness is commoditized.   The charismatic founder will still be able to pull a team of nerdy guys together to work with him.  Larry and Sergey are a lot smarter than Paul Graham and they had the foresight to bring in Schmidt.  The person who takes a company from $0 to $10 million is often not the person who takes it from $10 million to $1 billion.  Then again, that’s not a concern at Y-Combinator since revenue always equals $0.

5. You can’t write software (yet) to evaluate acquisitions. I’m not one to say that it can’t be done.  Technology is a beautiful thing.  What I can guarantee though is that any attempt at this software will require an incredible grasp of statistics, economics, and finance.  These are three skills that Paul Graham doesn’t have.  As I’ve shown in other articles, he barely understands business.  I’m glad you sold your last business Paul.  Don’t confuse causation and correlation.  Don’t confuse intelligence and luck.  You are a successful guy Paul, far more so than I am.  That still doesn’t mean that you can debate or argue or even make a coherent point.

6. College will persist. No matter what happens, the vast majority of people will not be entrepreneurs.  Would you like to have a doctor who said, “Oh hey, I dropped out of college after reading Paul Graham’s essay and decided to do my own hospital start-up.  Who needs an M.D. anyway?  So I’ve been working on this really cool technique for endoscopic surgery, I’m going to give you this bottle of Everclear and we can get started in 20 minutes.”

Give me a break.  All sorts of people will still need professional qualifications.  Degrees allow us to have a proxy of someone’s knowledge.  We’ve created such a system to lower barriers and allow more trade.  If no accountants had certifications, all we’d be driven by is a brand name we trust.  If we have certifications, the power of brand names is diminished in that field.  Regardless, entrepreneurs have a tough time in such fields because the risk of getting screwed over is high as is the pain from the act of getting screwed over.

Where Paul Graham is almost right but fails again:

1. Riskier strategies are possible.   The problem with his analogy to portfolio theory is that in portfolio theory returns are independent at any point in time.  Success for an entrepreneur is not independent of past success or “returns” shall we say.  As you computer geeks like to say: FAIL.  Another example of poor logic and a poor understanding of finance, economics, and statistics.

2. Startup hubs will persist but their value will be diminished.  Sure, Silicon Valley will still be the top dog in 25 years.  In 50 years?  I’m not so sure.  Regardless, if launching a web app is commoditized, then why would people put up with sky high rents, tiny apartments, old housing stock, insane costs, and a culture of low employee loyalty with no-non-competes (let’s not even mention the fact that California is one of the most highly regulated states).

Yes, entrepreneurship will increase especially as a lot of the Third World develops.  Yes, the internet makes entrepreneurship easier.  No, you’re still wrong Paul because you contradict yourself and you don’t understand statistics.

I rest my case.  Goodbye.  Follow idiots like Paul Graham at your own risk.

What is Zopa?

No, it’s not the latest group to hit the electronic music scene.
Although you would never be able to guess from the name, Zopa is “the
first lending and borrowing exchange.”  In case you still have no
idea what Zopa does, it’s basically a way for people to borrow money
from complete strangers or lend money to complete strangers.  As the
homepage touts, it’s a way to “cut out the banks by borrowing
at Zopa.”  I like to think of Zopa as Web 2.0’s alternative to
hassling your family and friends for a loan.

Who uses this web site?

As you can probably infer from the description of Zopa, the web site
appeals to two groups of people: borrowers and lenders.
Unfortunately,  you  can’t get any specific details about each group,
but if I had to guess, I would say that the borrowers range from the
driven entrepreneur to the last resort debtor, while the lenders
most likely range from the overly compassionate to the shrewd
businessman that is sick of the dismal returns on bonds.

Where is Zopa available?

Unfortunately, if you are reading this wonderful review from a
computer in the United States, you won’t be able to actually use
Zopa.  Currently, they are only available in the United Kingdom, and
although their homepage states that they have plans to make their
service available to the United States, there is no information about
how soon (or long) this will take.  However, if your inbox isn’t
already cluttered with enough emails, you can sign-up for the Zopa
mailing list and be notified as soon as their service is available in
the United States.

What kind of funding has Zopa received?

Zopa has gone through three rounds of fund-raising.  Here’s the
breakdown of each effort:

Round One: Unknown
Round Two: $15 million; announced on March 30, 2006.  This round was
intended to help them come to the United States (hasn’t happened) and
compete with Prosper (see below and decide for yourself).
Round Three: $12.9 million; announced on March 19, 2007.  Apparently,
they needed another round of funding to accomplish the goals above
(which, by the way, still haven’t been completed).

Do they have any competitors?

Although Zopa is the only service of its kind in the United Kingdom,
when they do finally make it to the United States, they are going to
have to go head to head with Prosper.  Here’s a quick breakdown of
the main differences between Zopa and Prosper:

-Design: Zopa definitely wins this category.  While Prosper looks
like it was designed in 1998 (it’s definitely better than Craigslist,
but it still doesn’t have anything special going), Zopa appears to
have been created by a web designer that followed the “Official Step-
by-Step Guide to Making a Web 2.0 Web Site.”  

-Function: In my humble opinion, if Zopa wants to compete with
Prosper, they’re going to have to take some pages out of the Prosper
play book.  Although Prosper may not be as pretty as Zopa, they do an
extremely good job of connecting borrowers and lenders on a personal
level.  While Zopa only allows lenders to choose borrowers based on
categories of credit rating and the length of the loan, Prosper
allows its lenders to surf through individual profiles and choose
individual people that they would like to give a loan.

-Security: When it comes to evaluating borrowers, Zopa is much more
rigorous than Prosper.  While Prosper only collects the basics
(social security number, bank account, income level, drivers license,
and credit score), Zopa goes above and beyond to screen the people
they allow to borrow money (this could be anything from evaluating
their business model to making a phone call to an employer
reference).  Because of their stringent requirements, Zopa is able to
boast an impressive 0.05% bad debt rate.

We won’t be able to really compare the companies until Zopa actually
makes their move to the United States, but to satisfy your curiosity
in the meantime, here are two graphs which compare their traffic
volume over the last year:

Note: Although Alexa and Compete both collect data about Internet
traffic, they each use different means to collect their data.
Therefore, it’s important to look at both graphs to find any
discrepancies.  However, since Prosper dominates Zopa in both graphs,
the previous point is moot for this specific situation.

Yawn. TechCrunch reports that MyHeritage and Geni are really duking it out. MyHeritage has raised $9 MM over three rounds. Geni has raised $11.5 MM at stupid valuations if TechCrunch is to be believed. It’s also interesting that the investors aren’t particularly known for foolishness either - Accel, The Founder’s Fund, and CRV. Then again, big firms make some of the stupidest move. My money is on both of these companies generating negative return for Accel and CRV.

In the case that our friendly fools in Silicon Valley forgot that the Church of Jesus Christ of Latter-day Saints (a.k.a. Mormons) dominate this business, I thought I’d refer them to FamilySearch.org which provides an incredible library of resources on ancestors. Now I know that Geni and MyHeritage are focused more on living relatives as opposed to FamilySearch which focuses on deceased relatives, but the point is that researching and cataloguing living relatives is boring and is not compelling. Why will Geni and MyHeritage fail?

1. These sites are not viral. There is little reason for them to grow. Let’s take a look at their traffic. Geni isn’t even as popular as the overhyped failure known as Justin.tv. Sure, Alexa isn’t perfect but given that these are major social networking sites, you’d think they have a bit more momentum. Clearly, they don’t.

2. If your family members are into social networking, they are already on Myspace, Facebook, Orkut, Hi5, Tagged, etc. and don’t care about Geni and MyHeritage. Yes, I know there is always room for niche social networks and in 20 years, Myspace and Facebook will be just a pleasant memory in our past - kind of like LA Lights. Older family members are unlikely to join and if they are, they are probably the kind of person who already has an account and will use another social network.

3. Current social networks already allow you to be “friends” with your family. This sounds silly, but you can tag people as relatives on Facebook. Why on earth would I want to join a social network just to “network” with my family. Unless I’m organizing the Smith Family Reunion, I think I can manage my family contacts fairly well with the pre-existing resources. If I was to be organizing the Smith Family Reunion, I’d just create a group on Google, Facebook, or elsewhere.

4. Being featured on TechCrunch is a proxy for being a dumb start-up. No further comment is required.

Bye bye Geni and MyHeritage.

“I believe that they should, our education over here in the US should help the US, er, should should help South Africa and should help the Iraq and the Asian countries”

Robert Scoble once again demonstrates that he is a a giant tool. Don’t get us wrong. We get link baiting just like everyone else, but the goal of link baiting isn’t to come off sounding as eloquent as Miss Teen South Carolina. His arguments are so bad that we aren’t even going to link to them. You’re smart enough to search for it if you wish to kill a few gray cells.

Scoble creates a video trying to seem like a mad scientist who has just made an incredible discovery and pretends like he’s using mental math to make an argument. Instead, he demonstrates that he has no data and an IQ lower than an Apache server. Duncan Riley follows as he’s not even smart enough to come up with a dumb argument like Scoble.

Here is why Robert Scoble is wrong:

1. The community is not infinite. Mahalo has no traction. GigaOm, a tech blog gets more traffic than Mahalo which is supposed to be a “search engine”. Search engines are supposed to be the highest traffic draws. Mahalo’s results in certain areas are decent, but most of the “cute information” is something that Google could pull just by scanning the Wikipedia entry for that title. Traffic to Mahalo is stagnating - it’s not quite the hockey stick for such a supposedly “social” site.

2. Social news and bookmarking sites do not have broad appeal. Digg has been out for quite a while. It has stagnated and traffic is not growing. After a few people with too much time on their hands dominate a network, others lose interest.

3. Passive technology is more rapidly adopted than technology that requires thinking and interaction. The inherent scalability issue with sites such as Digg and StumbleUpon is that there are only a limited number of people who really care about a topic and even fewer care to influence the search results for that topic. This is why Digg sucks - it’s dominated by a bunch of idiots. Do we really want our search results being influenced by pimply 25-year old geeks who still live in their mother’s basement?

4. SEOs will infiltrate this to an even higher degree than current search engines. Social networks are already overrun by spam. A tremendous percentage of pages on Myspace are spam. Many Facebook apps are spamming. Most social networks spam to grow big (ahem, Flixter). Web 2.0 is all about spam. Robert Scoble is spam.

5. Yahoo does not have “mojo”. Yes, it is true that Yahoo owns delicious and Flickr. So what? Flickr is mostly used by people in the San Francisco area - most of us don’t want our photos to be openly available to everyone. Then again, most of us aren’t desperate for attention. He argues that Google and Microsoft are screwed but Yahoo might be okay. Give me a break. Yahoo may be doing some interesting things, but delicious and Flickr aren’t part of the discussion there. The very fact that even extremely popular sites owned by Yahoo don’t have over 3000 bookmarks on delicious shows how worthless it is (and let’s not forget that it’s slow).

Scoble: 0

TechDumpster: One Googol

Interested? Email: mike@techdumpster.com. Include a brief backgrounder, links to any blogs you manage or write for, and/or a brief writing sample. Obviously, you have to be knowledgable about what’s going on in the startup world. And it helps a lot if you have a good sense of humor. Dave McClure, we’re looking forward to reading your app. We could even have that whole “you say tomat-oh, I say tomah-to” thing going on. Your mom will be so proud!

At serious organizations like NASA, when things go wrong, they try to figure out why. At joke incubators when things go wrong, they just wait for Web 3.0.

Coders who go through an incubator are not entrepreneurs. Many “hackers” who run Web 2.0 sites are not entrepreneurs. The definition of an entrepreneur is: “a person who organizes, operates, and assumes the risk for a business venture.” You have to run a BUSINESS to be an ENTREPRENEUR.

That means you have to have a business. A business makes money. Sorry losers, you don’t run businesses. Let’s run through all the worthless features being pumped out by our jolly fools over in Boulder (home to dumb start-ups like Kimbal Musk’s Me.dium - we’ll forgive them for having the dumbest domain name ever):

1. EventVue - a social network around conferences. I suppose if these chumps had ever attended a real conference, they’d realize that startups like confabb are already failures. Start-ups like nTag are raising major money and possibly causing cancer to an entire generation of conference goers meaning that EventVue is more or less DOA. UNSURE OF DEMAND. NO ABILITY TO GET PAID.

2. IntenseDebate - we already covered them and like the founder but it’s going to take a lot to scale this business and make money on it. The founder seems smart so they may figure out another model. UNSURE OF DEMAND.

3. socialthing - an aggregation of all your social crap.  It’s  a nice idea and I would actually like it, but the owners of the content are the social networks themselves and they have no desire to open things up.  Facebook has already proven that they aren’t that serious about being open.  This isn’t like RSS feeds where as a blog owner, I have an incentive to allow other readers.  Social networks are about communication, photos, etc., not about reading easy to share text content.  BIG BOYS WON’T LET IT WORK.

4.  J-Squared Media - another howler of a Facebook app.  4 million installs.  They claim to be generating $30,000/month in CPA ads.  That’s nice.  What happens when Facebook wants a piece of the pie?  What about someone who launches a similar app with no advertising (a la Free Gifts)?  UNSUSTAINABLE.  NO COMPETITIVE ADVANTAGE.  NO BARRIERS TO ENTRY.

5. Search-to-Phone - a voice-based search service.  Um yes, that’s called 411.  Oh wait, they call you back with offers?  No way!  That’s called lead-based marketing.  This is nothing particularly innovative.   Our good friends at TechCrunch couldn’t even spell “process” correctly here - it’s great to know how professional and serious TechCrunch is.  NOT NEW OR BETTER OR SHINIER.

6. Villij - it analyzes your social networking life to find people with similar interests.  That’s what your social network already does.  It’s heartening to know that TechStars’ $15,000 investment doesn’t even get the company to have a real business idea.  NO VALUE TO CONSUMERS.

7. FiltrBox - it allows you to filter blogs and news sites.  Yawn.  Way to design a product with a target market of 1,000 people who spend no money.  TINY MARKET.  NO WAY TO MONETIZE.

8. KBLabs - cool little Facebook apps.  I respect the co-founders because they built some nice apps and are going back to college.  SMART GUYS.

9. BrightKite - “place streaming”.  Yawn, more Loopt, Twitter, etc. b.s.  You recieve offers from local businesses such as bars.  I don’t know too many bars looking to give  $5 pitchers to geeky Web 2.0 guys who haven’t showered in a week.  DONE AND BORING.

It’s heartening to see that TechStars managed to waste a couple of grand and continue the circle jerk.  Paul Graham would be proud - after all, imitation is the greatest form of flattery.

Two blowhard idiots. One gets called on it, the other gets away because of bias in the media.

I find it incredible that the tech fluffers (Peter Thiel has a casting call out for “Personal Bitch” - I know Scoble and McClure have an app in, anyone else?) seem to think Facebook can do no wrong while whatever Myspace does is evil. Good old Michael “Low IQ” Arrington writes a post criticizing Myspace for accepting advertising revenue from CPG heavyweight Reckitt Benckiser. Wait, this is the same as having a sponsored group on Facebook. Arrington then pontificates:

If MySpace wants to be serious about addressing the issues facing its users, they should put up a non-sponsored resource. The function of Addiction411 is to sell more drugs, not necessarily to help users.

Cry me a river Arrington. If TechCrunch wants to help its readers stop being morons, why doesn’t it start a feature to tell its users about all of its conflicts of interest and all of the payola going on?

Arrington isn’t the only one who is guilty of treating Myspace like an Al Qaeda operative while assuming that Facebook is okay since it’s got an API. Tons of stupid A-list, B-list, and F-list (see Dave McClure) bloggers have given Zuckerberg and Thiel a virtual sexual favor but it’s time for the hypocrisy to stop. Let’s look at some important facts:

1. Myspace is bigger than Facebook. Myspace is at over 3x the page views of Facebook. That’s far bigger than the difference between the New York Yankees and the Tampa Bay Devil Rays. Also, don’t give me your b.s. explanation that Myspace inflates page views. Facebook does the same. Logging in to read messages is annoying but it’s a nice way to drive up traffic.

2. Myspace and Facebook are both social networks. They are not saving the planet, they are not educating people, they are not improving the health of denizens across the world.

3. Myspace and Facebook are both businesses designed to turn a profit. Myspace does turn a profit. As for Facebook, it may or may not. Regardless, they aren’t a bunch of do-gooders despite the fact employees of the latter may prefer Conflict-Free Celery Sticks grown by workers paid over $25/hour in the San Fernando Valley.

4. Myspace and Facebook are slowly becoming the same thing. Ugly, ad-infested pieces of crap. I’m no fan of Myspace. I’m no fan of Facebook either. The growing number of apps are polluting profiles and while they may not cause epileptic seizures to small children in Tokyo, they do make me want to hurl. Do I really care about the Flixter app or the RockYou app or the DumbassU app? No. Neither do 99% of people. They install an app and forget about it.

5. The people who got Facebook started aren’t friends with any tech geeks. Fact: Facebook got its start by students at top educational institutions in the U.S. Fact: Tech fanboys joined Facebook far later and were quite late to the party. Fact: Stanford, MIT, Carnegie Mellon, and other top engineering schools don’t produce tech fanboys. Their grads go do useful things with their lives. Fiction: Tech fanboys have attractive female friends or any real friends at all (see Scoble).

The message is stop treating Facebook and Myspace differently. They are both businesses looking to make a quick buck. Stop being so infatuated with the Valley b.s. and grow a brain.