January 19, 2008
We invested in Twitter and are bringing them to Japan
09:44 UTC » Social Software - Venture Capital
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October 14, 2007
Tallinn
01:07 UTC » Joi's Diary - Venture Capital
I just returned from a trip to Tallinn where I completed the paperwork to invest in GuardTime, an electronic archive and log authentication system using cryptographic time stamps.
The idea was developed by the founder of the company, Märt Saarepera and his collegues in Estonia when Mart was in Japan. Mart started out as an academic and a researcher, but became an entrepreneur in residence at my company Neoteny back when we were still incubating businesses. At the time, our team thought that the business was too early and passed on the investment and Mart set off on his own with support of his friends and family and some minimal support from myself.
Years later, it looks like the market is finally ready for Mart and his product. His idea has also developed from a rather theoretical idea to something they can show and ship.
Mart has raised money from a group of investors including the Ambient Sound Investments (ASI) founded and run by some of the Skype founding technical members.
Because of securities laws in Estonia, I needed to visit Estonia personally to open an account at a bank there. The banking in Estonia is really advanced, having been built from scratch after the Internet existed already. They use hardware password generators for their online banking and offer more services through the Internet than any other bank I’ve ever seen. Also, because they don’t have a lot of legacy crap like banks in Japan, they are very profitable and lean.
Tallinn was a very cool city. It is the capital of Estonia with a population of about 400,000. In many ways it reminds me of Helsinki except smaller and with Skype as the anchor IT global brand instead of Nokia.
The old town where I stayed was a beautiful district with the old architecture preserved and the random Russian government buildings scattered around typical of this former USSR region. Embedded in this old-architecture are very nice restaurants, shops and hotels built in the cool super-minimalist style of Nordic Europe that I love so much. I stayed at a hotel called Three Sisters and it was the best small hotel I’ve stayed in recently.
Another cool thing about Tallinn was that there was free wifi everywhere. The hotel, railway station, offices and airport all had free wifi. The Internet was faster than in Frankfurt airport, the Frankfurt Sheraton, in fact faster than just about anywhere that I’ve been recently other than my office in Tokyo.
I don’t know if it is the Estonian culture or Mart’s community, but everyone I met at GuardTime and Skype seemed happy and smart. There was a buzz of a strong culture and good work being done. I miss think sort of feeling “pure” feeling these days.
I’ve uploaded my photos in a Flickr set.
Technorati Tags: cryptography, Estonia
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September 5, 2007
Dopplr
Dopplr announced the closing of their seed round which I participated in.
Dopplr is social network for travelers. While it is possible to sync your travel schedules with people using other applications, no application that I know of has focused on and delivered the answer to the "when are we in the same city next?" question so well. The upside of Dopplr is that it does this VERY well and is perfect for people like me who usually meet my friends while traveling. The downside is that it's not that useful for people who don't travel or don't have any friends who travel.
The other great thing about Dopplr is that it was founded by, funded by and is being developed by some of my best friends..
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August 27, 2007
China trip
00:24 UTC » People - Photo - Venture Capital

View from Shanghai JW Marriott
Just returned from a trip to China with Reid, Michelle, Ellen and Kazuya organized by Leonard Liu and his team.
We met with VCs, entrepreneurs and a few of my old friends.
I was in Shanghai a few years ago just as the US VCs were starting to set up offices in Shanghai. Things have clearly moved forward a notch. The first wave of entrepreneurs have exited their successful ventures and are now on their second or third venture. The VCs seem to have a community. More and more US educated Chinese seem to be returning.
There are many things about the Chinese venture scene that remind me of the Japanese venture scene. There are clearly fewer experienced VCs and entrepreneurs compared to Silicon Valley. Many of the people are copying US models - some with a great deal of success.
The Chinese market in general reminds me of Japan during the bubble. Everyone hugely optimistic, explosion of spending, explosion of brands and luxury goods, investors from all over the place flocking to participate. While the dynamics are quite different and the market much larger in many ways, I see some of the similar indicators of irrational exuberance as well.
When we launched a lot of our ventures in Japan like Internet advertising, ecommerce and other things that were going strong in the US, we typically overestimated the short term growth for Japan. I have to give Reid credit for triggering this thought, but I now think that it is possible that many entrepreneurs may be overestimating how easy it is going to be to get Internet ads and ecommerce going in China. On the other hand, even very narrow nitchy markets in China are HUGE so it's possible to build pretty big business with a narrow focus compared to what you can do in the US or Japan.
I'm still not sure what we're going to end up doing in China if anything, but I'll keep you posted. Thanks for everyone who took time in their busy schedules to meet with us and share thoughts. Thanks especially to Leonard, John, Vivian and Stefanie for organizing such a great trip!
I organized my photos into the Shanghai part and the Beijing part.
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June 5, 2007
Media Companies driving Web 2.0 "boom"?
Reflecting on All Things Digital, I got the feeling that I've missed thinking deeply about something that is probably obvious to a lot of people. Big media companies are leading the charge (fueling the bubble?) into Web 2.0 probably even more than VCs and startups. I definitely felt a kind of bubble-like feeling at the last O'Reilly Web 2.0 Expo, but after D I realized that it wasn't really a bubble so much as a charge after hearing the heads of companies like CBS, News Corp., Time, Viacom, etc. talk about how they were basically just getting started. It seemed like they all had almost weekly pipelines of multi-hundred-million-dollar acquisitions planned. They talked jealously about how after the $900M Google deal to buy the MySpace ads, it was clear that the $580M MySpace acquisition by News Corp. was a steal.
John Markoff also mentioned to me that if you had bought Apple stock at the Google IPO, you would have done better than if you had bought Google stock.
Watching and listening to these big companies talking about "the space" it felt like, in their eyes, and possibly in reality, these guys were "running the show". If nothing else, they were providing the exit scenarios for most of the investors in Silicon Valley now. Chatting to various friends at Google and Yahoo, it was clear that neither of the two would pay the kinds of valuations that the media companies were paying for their acquisitions.
I had mused about this and had even talked about this trend, but listening to MediaCo-to-MediaCo chatter, really made a deep impression on me and makes me feel that maybe this exuberance will continue longer than I had thought... at least unless there is some larger market catastrophe... Which is good I guess. ;-)
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May 30, 2007
Last.fm and CBS
15:45 UTC » Music - Venture Capital
Congrats and "Good job!" to CBS and the Last.fm team! CBS and Last.fm announced that CBS will be acquiring Last.fm for $280 million. I think it's a good fit and the team seems happy with the deal. Last.fm have blogged about it and CBS has an announcement.
I was an angel investor and a series A investor in Last.fm.
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December 27, 2006
CC Business Mixter
23:18 UTC » Creative Commons - Venture Capital
It looks like I'l be able to make it to this event. If you're in SF and have a startup that involves CC or are a VC interested in this space, email John Buckman and see you there. ;-)CC WeblogCC Business Mixer: Calling for Creative Commons EntrepreneursCreative Commons and CC board member John Buckman will be hosting a CC Business Mixer on Thursday, Jan. 18th from 6pm-8pm at the Creative Commons offices in San Francisco. If you have an idea for a Creative Commons related business, this is your chance to present your idea to other like minded entrepreneurs and network with VCs. Have an idea you would like to present? Email John Buckman at johnbuckman@creativecommons.org.
Details: Creative Commons Business Mixer for CC Entrepreneurs
6pm-8pm, Thursday January 18th
Creative Commons
543 Howard Street, 5th Floor
San Francisco
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October 22, 2006
Is YouTube "Web 2.0"?
06:31 UTC » Sharing Economy - Venture Capital
Lawrence Lessig has a thoughtful post about something that I've been mentioning in recent talks I've given, but haven't blogged much about.
I'm often asked to speak about "Web 2.0". I personally think that people are trying to build Bubble 2.0 on top of Web 2.0. Instead of becoming a platform for the future of the Web, it's possible that Web 2.0 is becoming the platform for the short-term future of greedy people. However, I do think that it is important to understand that the recent success and surge in innovation on the Web is due to a semi-new set of principles. Part of the principles are a return to fundamental principles. The innovation on the Web and the Internet is driven by what David Weinberger has called "Small Pieces Loosely Joined" - a network created by small groups working together around open standards. It is and was a community of people and projects trying to connect to each other.
Bubble 1.0 brought the "customer acquisition and barrier to entry" phase with players such as AOL and Yahoo gobbling up companies and focusing on barriers instead of connectivity. A good example of a technology that happened to emerge during these days is instant messenger. Even today this spoiled brat doesn't interoperate properly leaving its users on their little Bubble 1.0 branded islands.
I think Tim O'Reilly's description of Web 2.0 is the best one I've ever seen. (Read it if you haven't.) My own view is that after Bubble 1.0 collapsed many of the unemployed or the recently happily "exited" entrepreneurs and developers started building tools in the spirit of Web 1.0 - in communities of people collaborating around open standards. The big difference was that many of the dreams we had during the Web 1.0 era were now more feasible with broadband, wireless, higher penetration, stabilization of various standards, faster computers and some lesson learning from the bubble.
I still remember when we were building Infoseek Japan I kept talking about how the web was going to be an incredible place for user publishing and that Infoseek would be an engine that would democratize media and voice. I was ranting about something that sounded like blogs and the long tail. Unfortunately, it was too hard to keep your web page updated and search engines and methods were not yet smart enough to filter the noise and sort out the context. We ended up with most of the traffic going to the mega sites like CNN and Yahoo.
To me, Web 2.0 is about trying to get right those layers of the stack that we weren't able to get right the last time around.
One of the central themes of Web 2.0 is the ability for users to control their own data and the ability for people to share and remix. In this context, many, if not most good Web 2.0 services allow users to download, link and reuse all if not a substantial part of the content they work on.
While it is not easy to extract data from Second Life, the content of what you build in Second Life and videos that you make in Second Life are owned by the user.
As Larry points out:
# Flickr, for example, makes it simple to download Flickr images. (See, e.g., here.)
# blip.tv explicitly offers links to download various formats of the videos it shares. (See, e.g., here.)
# EyeSpot (a fantastic new site to enable web based remixing of video and audio) permits the download of the source and product files. (See, e.g., here.)
# Revver (the site that enables an ad-bug to be added to a video so the creator gets paid when each video is played) builds its whole business model on the idea that content can flow freely on the Net. (See, e.g., here.)
In this context, YouTube is a "cool" poster-child of the Web 2.0 trend, but doesn't meet the basic requirement of allowing the user to download videos from the site. While it is "sharing", it is what Larry is calling a "fake sharing site". I think Japanese sites such as Mixi are as well. (Mixi is a social network site that doesn't syndicate or allow remixing or including of content in the site but encourages users to create and upload content.)
Although we can't really expect users to initially understand the distinction, I think in the long run, users will understand that stand-alone or closed services do not allow them the freedoms that are becoming exceedingly more common in the Web 2.0 area. I do hope that the rush to Bubble 2.0 doesn't allow companies to trample over the core principles of the Web in their drive for more ARPU (Average Revenue per User). I think it is important to keep our eyes on the ball and not lose our focus on what is driving the innovation and the increasingly rich user experience.
UPDATE: Nick Carr responds to Lessig and mentions this post and Lessig responds.
Technorati Tags: web2.0
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June 29, 2006
Reid Hoffman #22 on Business 2.0 list of most important people
03:25 UTC » Joi's Diary - Venture Capital
A belated "gratz" to my friend and co-investor/partner in most of my angel investments, Reid Hoffman for become a Rank 22 important person.
Business 2.0The 50 people who matter nowRank: 22
Reid Hoffman
Angel investor and CEO, LinkedInWhy He Matters: Want to launch a Web 2.0 startup? Be prepared to kiss Hoffman's ring. In his day job, Hoffman is the co-founder of LinkedIn, the online haven for business networkers. But on the side, he's also an angel investor with a knack for spotting young companies with big potential. Thus far, he's supplied insight and investment money to a remarkable number of successful startups, including Digg, Facebook, Flickr, Last.fm, Six Apart, Technorati, and Wink. And while the cash is nice, Hoffman's imprimatur has become even more important if you want to be seen as a player in today's Internet game. If he likes your idea, good fortune is likely to follow. If he doesn't, it may be time to rethink your business plan.
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April 30, 2004
Google S-1
07:43 UTC » Search - Venture Capital
Google's S-1 is online. (Warning. Big file.)
via CNET
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April 21, 2004
Sean Parker kicked out of Plaxo
16:57 UTC » Social Software - Venture Capital
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December 6, 2003
PC Magazine Editors' Awards
17:47 UTC » Blogging about Blogging - Joi's Diary - Venture Capital - Wiki
I feel like a proud dad. Six Apart's Movable Type got 5 stars, TypePad got 4 stars and an Editors' Choice and Socialtext Workspace got an 4 stars and an Editors' Choice in the recent PC Magazine's Editors' Choice Awards.
Good work folks!
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October 30, 2003
Following crowds
15:51 UTC » Introspective - Social Software - Venture Capital
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October 24, 2003
Google considers online IPO auction
07:55 UTC » Business and the Economy - Search - Venture Capital
Holy cow. Does anyone have any more information on this?The Financial TimesGoogle considers online IPO auctionBy Richard Waters in San Francisco
Google is considering holding a massive online auction of shares early next year in an initial public offering that investment bankers predict could value the internet search-engine company at more than $15bn.
I wonder if it's going to be a Dutch Auction IPO?
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June 23, 2003
Invested in Socialtext
23:44 UTC » Joi's Diary - Social Software - Venture Capital
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June 5, 2003
No-Shop Agreements
A few people have questioned my assertion that no-shop agreements make sense. I'd like to clarify my position. I do agree that in some cases, they don't make sense, but here's where they make sense.
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May 17, 2003
Our investment process
Wrote a not-so-organized entry about our investment process...
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