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Olson’s Observations

Technology. Innovation. Science. VC. Media. :: by Eric Olson

Archive for February, 2007

Blogosphere Magic: The Metal Cowboy

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Metal Cowboy LogoAll bloggers experience it at one time or another and in one form or another and I experienced some blogosphere magic just the other day. I recently read and reviewed Joe Kurmaskie’s first two books: Metal Cowboy and Riding Outside the Lines. The books were really great reads so I had to get the word out. Who would have thought the word would get all the way to the man himself?

Joe came across my posts the other day thanks to another reader of his and he took the time to shoot me a nice e-mail. Of course I couldn’t leave it at just one e-mail because, well, I’m a talker (or a typer in this case) so Joe and I started a dialogue. In that dialogue I mentioned how I really wished he’d start a blog and I offered to help him get one going. After working with Joe’s friend and business partner Gary for a little bit I am happy to report that the Metal Cowboy himself is now blogging.

Not only did I get to e-meet the author of some books I really enjoyed because of the blog post I also got to help get him set up with his own blog. What a great thing this blogosphere can be sometimes. I am sure Joe, Gary and I will stay in touch and continue to build up the site and the blog. Who knows, maybe we’ll even cycle together one of these days.

Until then, I will enjoy reading my Metal Cowboy Mayhem blog updates in Google Reader so I can see what Joe is up to. In fact, right now Joe’s working on some great stuff including a camp for kids called Camp Creative where kids will be able to participate in creative and outdoor activities.

If you want to help Joe build Camp Creative you can buy his books (his publisher gave him a great deal if people buy direct from him in terms of what he gets to keep and put back into the camp) or take a great adventure vacation with a new tour company called Rolling Roads that he and Gary are starting up. Most of the proceeds (in fact, I think all of the after expenses dollars) from both of these endeavors will directly help the camp.

Glad to have you in the blogosphere Joe!

Written by Eric Olson

February 27th, 2007 at 6:43 pm

Posted in General Thoughts

Widget Stats - Step 1

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Remember all of that audience engagement stuff I’ve been talking about lately? Well, we just made another step forward toward widget stats at FeedBurner today which is super exciting.

For those who don’t know, we have a service called Headline Animator that tens of thousands of our users, well, use. Headline Animator allows publishers to create a completely custom animated gif that cycles through the latest headlines in their feed. Check out Justin’s below as it’s a great example of what can be done:

This animated gif can be used just about anywhere on the web to promote ones content and that’s really neat but to make it wicked useful (excuse my Bostonian) we really needed to show publishers how many times their headline animator was viewed in a given day across the web. Consider that piece done (although we’ll keep improving it of course).

We now report Headline Animator stats along with site and feed stats to publishers and there’s more to come. I’ll leave the details to the official FeedBurner blog, Burning Questions, because Dick did a great job of describing everything over there so read his post if you get a chance. It’ll be well worth your time.

Written by Eric Olson

February 27th, 2007 at 6:20 pm

Posted in FeedBurner, Media, Media 2.0

How Does the Feed Market Shape Up?

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FeedBurner LogoWith Google starting to report their numbers to us over the weekend, which increased our overall reported subscriptions by about 53%, we thought it was time to start looking at the feed market and for us to get a report out that could help publishers (and advertisers) understand the landscape a bit better. It took a lot of queries and a lot of time to sort through all of the numbers but we got it done and the FeedBurner feed market report is now live on our blog.

With a sample size of over 600,000 feeds which represent about 350,000 publishers we have unparalleled insight into what is happening in the world of feeds but there are still challenges that we face when trying to compare subscriber market share. The two main challenges are: not all subscribers are alike (feed readers report differently) and default feeds (feeds bundled of listed for new users of a newsreader) are popular meaning they have disproportionately high subscriber counts in the aggregators where they are defaults. Thus, we figured measuring market share based on subscribers may not be the best method. Luckily we had some more compelling data that lead us to the idea of Audience Engagement, or how many folks are clicking on or reading the content within the feed as a better measure of market share.

With the idea in hand we started looking at the click and item view data we had to see what the market looked like at this point in time. Rather than reposting all of our pie charts, graphs and notes here I urge you to check out the official post as it describes things much more eloquently than I could and it has some really slick graphics to accompany the text which I know you will love. I also urge you to check out (and subscribe to) the Publisher Tips blog for a glossary of feed terms and “Quick Hits” on each of the major feed readers that will help you understand how they function among other great tips that will help you get the most out of FeedBurner.

The main thing we should all remember is that we live in a world where media is becoming more and more distributed and the backbone of that distribution is the feed. With that in mind we are going to continually bring you new things like widgets and the stats to allow you to track their consumption. Our goal is to give you a complete view of your media consumption across all channels and to start linking the distribution channels’ stats together to produce an integrated view of your audience engagement (another post on that here). So stay tuned as there is a lot more to come.

Written by Eric Olson

February 22nd, 2007 at 12:34 pm

Posted in FeedBurner, Media, Media 2.0

Marketocracy: Behind the Numbers

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MarketocracyMutual Funds - We all use them and a lot of us rely on them for the bulk of our retirement savings but the percentage of us that know a lot about them is very small. In a prior life I worked in the mutual fund business and I thought that I would someday be a mutual fund manager before the entrepreneurial bug bit so I know a little bit about how the funds and the business of funds work. Needless to say I was very intrigued when I saw a piece on VentureBeat the other day about a newish fund/asset management group called Marketocracy.

The idea is a fairly simple one and one that has been tried before. Ken Kam, who co-managed the Firsthand Technology Value Fund in the bubble days (which was rated the no. 1 fund by Lipper - the defacto fund rating firm - for five years no less), thought that getting a lot of top minds (80,000 or so) together was the best way to pick a portfolio. Marketocracy was the vehicle for this. It allowed anyone to sign up on the web and manage a fund with a virtual $1mm. The best managers would then rise to the top and give Ken the ideas he needed for the Marketocracy Masters 100 fund (MOFQX).

The masters 100 fund has gone on to return 71% since inception (Nov 2001) which is a pretty good return. Now Marketocracy is even branching out into the managed accounts business ($10k minimum investment) where Ken will blend the four masters he just chose (i.e. best earning portfolios at marketocracy out of the 80,000) to achieve top returns for investors. Not bad, eh? I mean, who doesn’t want to earn 71% over 5 years in a mutual fund and possibly even more with the managed account? Answer: you.

Now, don’t get me wrong, I’m not saying that you shouldn’t want to make 71%. What I am saying is that it is not a great return relative to other similar funds. Not convinced? Let me prove it.

I’ve got the hook-up in the mutual funds biz so I had some Morningstar reports pulled on the Marketocracy masters 100 fund. What I was able to find was pretty surprising. The 71% return was correct and totally legitimate so that wasn’t the issue. The issue was with the beta and alpha of the portfolio (see Morningstar chart below).

The beta and alpha of the masters 100 fund relative to the S&P 500 are 1.69 and -6.28. The S&P has a beta of 1.0 so the fund is riskier than the S&P. Big deal - no risk, no reward right? Definitely. That’s where alpha comes in.

Alpha measures the relative risk of the fund as compared to the market (S&P 500 in this case). A negative alpha means that the fund did not achieve returns large enough to justify the risk taken. As you can see, the alpha of the masters 100 fund is pretty darn low meaning that the risk was far too high for the returns achieved. Basically, if you were invested in the masters 100 fund you took a lot of extra risk that you weren’t compensated for.

Ah, but what about the best fit index to the right, the Russell 2000 Growth? Good point. So, what Morningstar is saying is that the Russell 2000 Growth index is better aligned with the investment profile of the masters 100 fund. As you can see the numbers don’t look as bad. The beta is less than one so the masters 100 fund was less risky than the Russell 2000 Growth. However, the alpha is -1.41 meaning that the returns were still too low for the risk taken.

Now, I know the fund still made 71% so it wasn’t a bad place to be. However, there were similar funds to the masters 100 fund that did far better over the past five years. For example, there is a Fidelity fund in the same category as the masters 100 fund that did very well over the same period. How well? Check out the data below.

Holy cannoli! The Fidelity fund returned 246% in the same time frame that the masters 100 fund returned 71%. That’s a huge difference which is even more apparent when you check out the annualized returns also listed in the above graphic.

So, the moral of the story is to always dig. Sure, I would have been happy with a 71% return. However, I would have taken more risk than I needed to in order to achieve that return and there were some better options out there in the same category as the masters 100 fund.

In the end of the day the masters 100 fund has only proven to be an average performer so far. But, as the mutual fund lawyers say, past performance is no guarantee of future results (i.e. investors beware). Ken Kam is definitely a bright guy and a really good fund manager but he hasn’t leveraged the full power of the wisdom of the Marketocracy crowds just yet. I still think the idea has some merit (if you’ve got 80,000 virtual portfolios there are bound to be some great ones in there) and that it just needs to be executed well. Let’s see if Ken can make this idea pay for him, the investors in the marketocracy products and his investors (yup, he’s got some VC - $16mm to be exact - from US Venture Partners, Formative Venture Partners and some individuals).

Side note: Please don’t take this as official financial advice and get upset when things don’t pan out down the road.  Again, investor beware.

Written by Eric Olson

February 21st, 2007 at 11:11 pm

Posted in Investing

Ask the Wizard: Dick’s New Blog

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Wizard of OzI am happy to report that our CEO, Dick Costolo, is now back to regular blogging with his new offering Ask the Wizard. Dick was inspired by Jason and Brad’s blog, Ask the VC, to get going again and to create a blog where he could answer some burning questions all entrepreneurs have about starting and running businesses.

Dick is not only an experienced entrerpreneur he’s also hillariously funny and full of sarcasm so the blog will be both useful and very entertaining. The topics covered already range from non-founder equity issues, bringing in outside directors and pitching companies. I have read each post and they are well worth your time (I swear I am not just saying that since he’s the big boss). Don’t believe me - check out Brad’s post.

Give the site a read and subscribe to the feed while you’re there. I am sure you’ll be glad you did. Glad to see you writing again Dick!

Written by Eric Olson

February 19th, 2007 at 2:27 pm

Posted in Business, FeedBurner, VC, Web 2.0

Roomba Update: iRobot Support

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As most of you know I absolutely love my Roomba. The thing is just incredible and it saves a lot of time. So, needless to say, I was pretty upset when after the first week of use the Roomba decided it was no longer going to charge rendering it useless. What was I to do? I needed to head to iRobot for support of course.

Support is the true measure of character for a company in my opinion. Some support is awful (Comcast) and some is incredible (FeedBurner - I may be a bit biased). I wondered how iRobot’s support would fare.

I logged on to the iRobot site and proceeded to load up the live chat window to talk to a support rep about my issue. To my surprise the wait was only 2 minutes. So far so good! The rep that came on after my brief wait was incredibly nice and helpful. I tried the troubleshoot tip that the rep provided and it didn’t fix the Roomba. Bummer - it looked like I needed to make an exchange and I had to talk to support again to do it. I hoed the second experience would be as good as the first.

The next support rep I received a couple days after the troubleshoot from the first session didn’t work was equally as great as the first. I explained that the troubleshoot didn’t work and that I needed to make an exchange. She said it was not a problem at all and that she’d e-mail me the details on the exchange process and a UPS shipping label so I wouldn’t have to pay to ship it back. Not only that, she also threw in a three pack of replacement filters for my trouble.

Now that’s great customer service. I received my new Roomba Sage in about 3 business days and I’ll be a customer for life. I may even have to spring for one of iRobot’s “I Love Robots” t-shirts. Thanks again iRobot. You guys rule!

Written by Eric Olson

February 19th, 2007 at 1:57 pm

Posted in General Thoughts

It’s Starting to Feel a lot Like Spring

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Red Sox NationWhile a blizzard just struck Chicago yesterday (and today too) and the regular temp including the windchill over the past couple weeks has hovered around -15 I am feeling warm this week. Why you ask? No, it’s not because new (read: functional) windows are being installed in my apartment which actually keep the cold out it’s because Spring Training is beginning.

Pitchers and catchers report this week and I, along with the rest of Red Sox Nation, will be keeping a close eye on our new (and very expensive) pitcher, Daisuke Matsusaka (Dice-K for short). He showed up in Fort Meyers yesterday and appears to be comfortable with the media already which is a must for any Red Sox player.

I have to say that I am very excited about this season and the 2007 Red Sox. We (and by we I mean Theo Epstein) have put together a great team this offseason and they are almost ready to hit the field. We have returning greats like David “Big Papi” Ortiz, Kevin Youkilis and Jonathan Papelbon who will continue to grow this year playing alongside rookies like Dustin Pedroia (2B) who we have watched through the Sox minor league system while looking forward to his big league start.

Along with the guys from our organization we have some new talent coming in from across the league. J.D. Drew is probably one of the more notable offseason pick-ups. He’ll be helping us sure up the outfield in right field (we’ll miss you Trot!) and will add some more hitting to the lineup.

Here’s hoping we can make something happen with all of this talent. I’ll be heading back to beantown for the April 21 game against the Yankees which I am sure will prove to be a blast.

If you’re into the Sox (Red not White) I recommend the following reading:
Extra Bases
The Official Red Sox Site

For general baseball info my favorites are:

Baseball Musings
The Hardball Times

Here’s to America’s pastime. Play ball!

Written by Eric Olson

February 14th, 2007 at 12:28 pm

Posted in Sports