Global Nerdy

While I don't often give in to the techie compulsion to have the latest and greatest gear, I think I purchase more tech stuff than the average non-techie, particularly when it comes to computers. Back when I was an independent software developer, I was always a little paranoid about having my computer go out of commission, and so I gladly forked over an extra couple of hundred dollars for the extended warranty.

In the past fifteen years, I've never had to make use of the extended warranty. I've had to make use of the standard one-year warranty twice: once with the faulty hard drive on a Toshiba laptop and once with a company-issued Dell Inspiron laptop whose video card preferred to display static.

That's to be expected. Many products, electronics included, generally fail either very close to the start of their working lives or at the end of their expected lifespan from wear, tear and regular use. The “bathtub curve” is a term that's used by statisticians to describe the probability of failure of these products, and it looks like this:

I stopped buying extended warranties around 5 or 6 years ago because I was beginning to get the feeling that they were nothing more than a surcharge for the overly cautious. Between never having had to make use of them, constantly falling prices and the rather suspicious insistence of salespeople that I should buy one, even for items that cost less than 50 bucks, I was getting the gut feeling that they were a rip-off.

Someone's done the math and my hunch was right. A New York Times article titled The Word on Warranties: Don't Bother expains why:

• They're actually a profit center for retailers. The margins on electronics are very thin, but they extended warranty margins are as high as 80%.
• It's a sucker's bet: you're betting against the bathtub curve and you're also betting against the trend of falling prices in the belief that the cost of repair will exceed the cost of replacement.
• A Consumer Reports study shows that only 10% of digital cameras fail in their first five years. For the extended warranty to be valuable, it would have to be less than 10% of the purchase price, yet extended warranties often cost as much as 20% of the item's price. Besides, if you had a five-year old digital camera, you'd probably want to replace it, not repair it.
• Last year, suckers spent $16 billion on extended warranties.

So take it from us (and the New York Times too): skip the extended warranty.

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In Case You Missed the First Two Installments…

My first attempt to install Vista is documented in this entry, and my second attempt is here.

It Don't Bother Me Too Much

In a former life, back in the late 1990's, my friend Adam and I had a nice little consultancy in which we developed custom applications for small- to medium-sized businesses. In those days, we were busy enough to turn away potential clients, and as a two-man operation, we had to be jacks of all trades. Often, we'd have a client too small to have their own IT department, which meant that we got paid extra to help them with their IT woes. One common task was upgrading their operating systems to Windows 98 from Windows 95 or hoardy old Window 3.1, or maybe even DOS.

There's a point to all this exposition, and here it is: the difficulty that the Windows Vista installer had been giving me hadn't worried me thus far. I've actually had hairier installation experiences in the days before reliable plug-and-play, and as I've said before, the Wintel desktop at work wasn't my primary machine. At the end of my second install attempt, I was only a little annoyed.

As for the machine on which I'm installing Vista, it's not an old clunker. It's an IBM/Lenovo ThinkCentre desktop with a 3GHz Pentium 4 and half a gig of RAM that's six or seven months old. The likeliness of hardware incompatibility is rather low, and as a standard-issue large-vendor corporate computer that a white-collar worker-bee is likely to be assigned, it's likely to be in Vista's target machine set.

If Microsoft should be worried about anyone getting a bad impression about Vista, it should be people who don't eat, sleep and breathe computers like my colleagues and I do. These are the people who might not have an idea of what to do when confronted with the results of my first attempt to install Vista: that single line of garbage DOS text from my first install attempt.

And now, the final chapter in the Area Man Attempts to Install Windows Vista trilogy.

Shut Up and Reboot

Every IT worker knows this quick fix that handles about 90% of all computer problems: Shut up and reboot. This mantra has been repeated so often that it's been used as a gag on t-shirts and in at least one television show, The IT Crowd:

So that's what I did. I rebooted the machine, making sure that it booted from the DVD. I deleted the existing disk partition on the drive, created a new one, formatted it and selected it as the target for the Vista Install.

Lo and behold, it looked like it was working! Apparently, as it is with Windows software, one should always wait for the third version.

Here's what my Vista desktop currently looks like:

I've been working with it on and off for about two days now, and I'll post my impressions here as I continue working and doing some software development in it.

A little late to this item, but I think it's a bellweather for the startup market, so I'd be remiss in not commenting on this story from VentureBeat: 

Charles River Ventures, an early stage venture capital firm, has launched a new investment strategy, offering rapid but tiny $250,000 checks to Internet start-ups.

The program, called QuickStart, recognizes times have changed, and that Internet companies no longer need the vast amounts of cash that most venture capital firms want to give to them. The CRV program also offers entrepreneur the friendly terms of the “convertible” seed round.

Of CRV’s last five deals, four were seed rounds (three consumer Internet companies, and one chip intellectual property company). The partners acknowledged that some deals — such as solar companies — need millions. But they said a majority of the deal leads they see these days falls into this seed category.

CRV is just reacting to the fact that conditions are very different for startups today. They don't need to spend a lot on non-differentiating infrastructure and platforms, they can rely on a lot of individual word of mouth for marketing driven by blogs and wikis, and it's easier to deliver rich user experiences through standard browser clients. All of this lowers the barrier to entry in the software business to historically low levels. You don't need millions to invest in deep, proprietary platforms on which you'd build your business. VCs whose stock in trade was raising billions and investing millions were getting themselves frozen out of this segment of the market.

The reaction to the CRV news has mostly been positive, but two of the more prominent early-stage VCs have made a couple of interesting observations. Josh Kopelman at First Round Capital says:

I've always believed that one of the key roles a seed-stage investor plays is to help their portfolio companies raise a Series A round.  One of the reasons I don't like bridge loans, is that there is not alignment of interest between the lender and the entrepreneur.  As a lender, I would convert into the price of the next round — motivating me to keep the next round valuation low.  As a shareholder, my motivation is aligned with the entrepreneur — we both get rewarded by a higher second round valuation.

In other words, as a lender with an option to convert into an owner, a Series A financing has your seed lender acting like a potential investor, rather than as an existing owner. The difference is simple and important: potential investors want to buy low, while existing owners want to sell high.

There's also the question, raised by Fred Wilson at Union Square Ventures, of whether a big firm like CRV has the bandwidth to give these tiny opportunities the TLC they'll need to move from idea to product.

[W]e really want to engage with each and every investment we make. I read comments all the time on my blog and elsewhere that suggest that the new environment rewards firms that can make a much larger number of investments because web services are capital efficient and you can do more with less. Well that may be true, but we have been rewarded the most over the years when we engage deeply with a company and we are not going to lessen the engagement simply to get more names in the portfolio without thinking long and hard about the tradeoffs.

While some firms are quitting the scene, in part because of the new financial dynamics, it's nice to see another VC graybeard try to adapt to the new reality.

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Tags: VC, seed, bridge loan, Charles River Ventures, CRV Quick Start

A quick post that will betray my Canadian roots:

The National Hockey League has annunced a new multi-year video content deal with Google Inc., making full-length games from the '06-07 season and some classic games available for online purchase on a 48-hour, tape-delay basis.

"This is obviously an on-demand world where people want what they want, when they want it, and where they want it," said NHL Interactive CyberEnterprises President Keith Ritter. "Google is a place where we definitely need to be."

Discussions about a future video content deal with Apple are still ongoing, Ritter said, as are efforts to offer live streaming of games online.

No word on whether Don Cherry will get his own show on Google Video, where he criticizes European search engines.

With MLB.com being touted as the belle of the online sports media ball, it's no surprise that the NHL is trying to get their digital ice, uh, Zamboni-ed? Whatever. I'm just happy I'll be able to follow Les Habitants from afar without having to buy a whole slate of games that are of no interest to me.

The videos will be free for the next two weeks, so drop the gloves!

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Tags: NHL, Google, video

Normally, TechCrunch breaks stories but today it would seem that Mike Arrington's budding technology news empire is the story. A Crunchnote from Arrington posted earlier today says:

The last two weeks has brough a fresh wave of TechCrunch hate. I’ve learned to avoid responding to this stuff in the past because it just draws more attention to it, but tonight a reporter from the Syndey Morning Herald named Asher Moses emailed me and said “First off, great site – i’m a regular reader of yours.” He then went on to say he’s working on a story about the “disclosure scrubbed at techcrunch debacle.”

I took issue with his use of the term “debacle” before actually speaking to me – this tells me everything I need to know about this particular reporter’s slant on this “story,” and basically told him to fuck off. And while I’m not surprised that someone is looking to do a hit job on TechCrunch, I am surprised that traditional media is starting to see TechCrunch as newsworthy enough to attack. I don’t know if that’s a good thing or a bad thing.

With regards to the actual details of the angle the Herald has on their (yet-to-be published) story—that Arrington ignores news about startups who compete with companies he and his friends have an interest in—I have nothing to offer than my observation that TechCrunch seems to do right by their readers with disclosure. In other words, I won't quibble when Arrington says:

My record is clean. I call things like I see them. I disclose financial conflicts. I’ve complimented direct competitors to a startup I founded (see here and here), edgeio. I’ve slammed sponsors (see my comments on ReviewMe). There’s a very good chance I am going to rip apart a startup I invested in when it launches soon if they don’t get their shit together.

Still, this is an interesting situation, and Mike, in this post at least, isn't giving the debate its due. He's setting this up as the latest skirmish in an MSM vs Bloggers civil war, a position that both aggrandizes the Herald article (when it's really a non-story) and downplays the more serious and larger issue of how a financial insider can play the news game.

TechCrunch is a media company. A news outlet. A tipsheet. Perhaps a combination of all three. It also happens to be produced in part by a person who's an active investor in the industry, and while he clearly discloses his interest in companies when he writes about them, he doesn't necessarily talk about his investments when the subject is the competition. That's not a conflict for the Wall Street Journal (and, I assume, the Sydney Morning Herald), but a new one that a company like TechCrunch creates. That's one of the main points of a rather long Nick Carr post on ethics, blogging, and TechCrunch from earlier this month. And much as it pains me to agree with Nick Carr, I find myself doing so at his conclusion:

When it comes to conflicts of interest, or other questions of journalistic ethics, the proper attitude that we bloggers should take toward our counterparts in the traditional press is not arrogance but humility. In this area, as in others, blogs have far more to learn from newspapers than newspapers have to learn from blogs.

Which is the point that journobloggers Matt Ingram and Heather Green make: There's a real debate here about how newly-powerful chroniclers of the blogging age should best serve their readers, but it's not at all aided by a false Revolutionaries vs Dinosaurs argument. Traditional journalists have personal relationships, political considerations, and financial relationships, too. They've developed standards and conventions that help them deal with these issues, and bloggers would be foolish to ignore them.

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Tags: TechCrunch, Arrington, conflict of interest, transparency, journalism, ethics

This CNN report says that according to Netcraft, there are now 100 million web sites:

There were just 18,000 Web sites when Netcraft, based in Bath, England,
began keeping track in August of 1995. It took until May of 2004 to
reach the 50 million milestone; then only 30 more months to hit 100
million, late in the month of October 2006.

This calls for a graph! Here's one from Netcraft, which shows both hostnames and “active” sites, from August 1995 to the present day:

That's a lot of pictures of kittens and porn.

Netcraft lists these previous milestones:

• April 1997: 1 million
  sites
• February 2000: 10 million sites
• September 2000: 20 million sites
• July
  2001: 30 million sites
• April 2003: 40 million sites
• May 2004: 50 million sites
• March 2005: 60 million sites
• August 2005: 70 million sites
• April 2006: 80
  million sites
• August 2006: 90 million sites

Greg Sterling offers his thoughts on this latest milestone:

This all means that there’s more and more noise online and it’s only
getting “worse.” I’ve been talking about that in the limited context of
local. But the general cacophony of new and me-too sites and services
only means that brands and habitual behavior become more powerful;
people will fall back on what they like, know and trust rather than try
new things.

The idea that “our competition is only a click away” only really
means something if you’re a no-name site. It’s very different if you’re
Google or Yahoo (or even MySpace now).

People talk about “the Internet” in the same way they discuss “the
small business market.” There is no “small business market,” there are
only 10 or 14 or 17 or 20 million small businesses, with some shared
characteristics. Similarly, “the Internet” is not a monolith, but 100
million websites.

Thus those would would “aggregate the tail” (whether eyeballs,
publishers/site or marketers) are thus increasingly important to the
online ecosystem.

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