Mitch Lasky Benchmark Capital Mitch Lasky has spent more than two decades in the mobile gaming, new media and interactive entertainment business. Prior to joining Benchmark Capital, Mitch served as executive vice president of Mobile and Online at Electronic Arts. Previously, he was chairman and chief executive officer of JAMDAT Mobile, Inc, the leading global publisher of wireless entertainment applications, which was acquired by EA in 2005. Prior to JAMDAT, Mitch served as general manager of eCompanies Wireless LLC, an Internet business incubator. He also spent five years at Activision, most recently serving as executive vice president of Worldwide Studios. In that role he was responsible for product development, business development and global operations. Earlier in his career, Mitch practiced law, worked at the Walt Disney Company and started a massively multiplayer online game company.
	Mike Trotzke SproutBox Mostly, I’m into building things: companies, web apps, consensus, relationships. I’ve been lucky to do a lot of what I like. I started my first company while in college. Spun off another one and sold it to a large company. Before that, I traveled around making audio recordings of marching bands and did media for political campaigns. I’ve had fun making money. Designing and coding cool web apps is a blast. I’m motivated by creating things that have value to lots of users. While I’m squarely a geek, I don’t cling to being any particular type of person. I have a very entrepreneurial mind set and focus a great deal on business strategy, sales &marketing, and company culture. I have an awesome wife, Bets, and an evil cat, Thomas. Not sure why Bets puts up with me or why we put up with Thomas, but we all seem to get along pretty well. My coworkers are many of my friends, and I don’t draw a firm line between work and personal life. I’m fired up to meet and help other people in the spot I was 12 years ago: just starting out. Feel free to contact me anytime, or stop by the Alley Bar in Bloomington any Thursday after work. I’ll be there.
	Jolie O’Dell ReadWriteWeb Jolie O’Dell is a tech journalist for ReadWriteWeb. She’s been working at startups and news publications for more than 10 years. She lives in San Francisco.
	Dave Mcclure 500 Hats

Chris Wanstrath, founder of GitHub

Session:

To get funded at the Powerpoint stage, you probably need to have a track record with VCs. Otherwise you’ll need a functioning prototype or more, like paying customers.

There are companies that shouldn’t be raising venture capital, and there are many that aren’t going to get funded because demand far outstrips supply. When you build a business, venture capital should be a second order consideration. Build a solid business first and think about venture capital second … your business should not be about raising the money. On the other hand,there are companies that do require venture funding, because they do need to get the servers and bandwidth and employees to be able to scale.

“Don’t write business plans. It’s a f*ing waste of time” –Mcclure. For Dave, the trust filter is the most important, and he only considers startups who have references in common.

Wanstrath did not take Venture Capital for Github. It did take a lot of money to set the company up, but they found other ways, including friends and family. They made a lot of business deals for servers, maxed out credit cards and borrowed money and generally did whatever it took. They did not feel a $10 million valuation was fair when they were profitable making $1 million in revenues. They certainly did not want to take on a VC that was going to start setting their direction.

Lasky sees a lot of great companies that are not good venture investments, because the return profile does not fit the time or ratios that VCs are looking for. For example, a $500 million fund will invest in 30 to 40 companies and are looking at 3X return on capital in 10 years. So they’re looking for $250 million exit for all companies, or $750 million with a 2/3 failure rate. Smaller VCs with funds under $100 million can tolerate smaller exits. An example would be Mint, which is a company that did need venture backing.

Huge exits are not the median scenario by any means and the venture capital game has a huge corrupting effect on startups. A better approach is to build a cool business and then things will happen. For most businesses, the core product can be built by two people in eight to ten months. This means a $50k to $100k investment, which is not VC; it’s personal savings and friends and family. The crucial seed phase is $250k to $1 million, where it’s really hard to bootstrap to that size. The best thing to do is to look at VCs with funds under $100M.

The average Techstars deal is investing $15k to $30k for about a 7% to 10% stake on a $300k valuation — but they bring huge value in their mentorship model. However, this is good for students out of college, because they have no savings.

The typical scenario is taking a 20% to 40% dilution when funding through VCs, and probably more.

There are plenty of lifestyle businesses online where the founders can make $1 million to $2 million per year and live happily ever after without having a big exit plan.

When pitching venture capital, you have to sift through the good, the bad, and the criminally negligent. Weird term sheets, dishonesty, etc., are the pitfalls to watch out for. Venture capitalists fund the expansion of the business in anticipation of upcoming revenues. The idea is not to figure out new ways of spending the business; the fundamental concept is to spend the money in ways that grow the business. VCs are willing to fail, whereas banks are not.

What are the alternatives to VC funding? What do you do if your friends and family are broke?

The important thing about alternatives is that there is no industry based around bootstrapping, like there is around venture capital. First, figure out what you need and then start cutting. Do you need PR? Do you need an office? What can you do away with? After that, figure out where you can get the money from. Taking money from parents or going into debt is a big deal in case of failure.

A realistic alternative to bootstrapping is raising $100k to $2 million for up to 20% of the company, with an exit at $10 million.

Q&A:

European entrepreneurs a decade ago were pissed off about how difficult it was to raise money, because of hugh risk aversion. The American model of risk is migrating over and things seem to be getting better for European startups.

Customer financing with upfront discounts, customer receivable financing or factoring, asset-backed leasing are some other alternative strategies to help manage the cash flow and offset the need for fundraising.

Wanstrath would not bootstrap a consumer web company or a consumer app.

Wanstrath advises opening up as many different revenue streams as possible. Offer people many different plans and ways to pay you for your services.

For Lasky, the difference in being there six months early meant a $400 million advantage in valuation over the second mover in his market.

The venture capital industry has to contract. There are too many firms with very mediocre results. Part of the reason is there are more mature companies doing deals earlier.

If you have 20% equity in your startup and are looking for a $10 million payout, then your sweet spot for exit must be around $50 to $75 million.

whoneedsvc, venture capital, bootstrapping, fundraising, startup, finance, business plan, sxsw, sxswi

As I drove home last night from Craig Agranoff’s “Pizza Tweetup”, I took a stroll down memory lane and thought of how far we’d come along as a community in three and a half years.

When I moved back to Miami, there were no new media meetups to speak of. I missed the Stormhoek geek dinner in May 2006, which was a one-off, and judging from the pictures, it looks like more jet-setters made it to the party than geeks.

Miami’s bloggers, web developers, designers and startup community in general mostly kept to themselves. Soon after I moved back, I lamented (April 2006):

“The South Florida blogging scene seems very laid back, as you might expect with the mix of great weather, beaching and boating … and perhaps a more conservative, “Southern” lifestyle. Relative to Paris, there seem to be fewer local blogs and no events to speak of”

As I look back now, that single blog post set off a chain of events in my life which led to the creation of four main meetup groups and the development of our vibrant community of new media professionals  (see Craig’s post: “South Florida has no tech community?”). These include RefreshMiami, BarCamp Miami, Mobile Monday Miami, and Social Media Club South Florida.

An hour or so after I lamented on my blog back then, Lori Leach Forster — a web designer I have not met and who has subsequently moved to Georgia — commented on my post and introduced me online to Brian Breslin, with whom I co-organize RefreshMiami. I wanted to set up a regular event and Brian spoke of creating a local chapter of Refreshing Cities. Although I hadn’t heard of Refresh, having lived in Paris and London for the past decade, it sounded like a good fit.

After a few months and many long threads on Google Groups, five of us showed up for our first meetup at a Starbuck’s on South Beach; we should have known better than to schedule a meetup in Miami  at noon on a sunny Spring Saturday! From that inauspicious beginning, Brian and I grew the organization to its current membership of over 1,500 South Florida web professionals and startups. Our monthly events gather 130 participants, on average, and have become a hub to meet new people, create friendships, and find job opportunities. RefreshMiami is held on the last Wednesday of the month. If you’re in town, you’re welcome to attend.

Five months later, I set the wheels in motion to develop Miami’s first  BarCamp. I had met Chris Messina at the first BarCamp in Paris and loved the experience and the concept of a “user-generated conference,” where participants create their own learning experience. Professor Kim Grinfeder of the University of Miami School of Communication helped secure space and sponsorship, and we held the event in February 2007. About 60 people attended, 5 companies sponsored, 15 participants presented, and The Miami Herald wrote up a nice article about it (archived). I have since organized two more BarCamps, one in February 2008, with  300 people, 15 sponsors and 35 presentations, and this year’s event, which counted 600 participants, 38 sponsors and 70 presentations. The community has embraced the BarCampMiami concept and similar events have recently been held or are in the works, including LaidOffCamp Miami and REBarCamp Miami (Real Estate).

After last year’s BarCamp, I started up a local chapter of  Mobile Monday Miami and invited Jeff Sass and Florian Seroussi to the board. Why Mobile Monday? I had worked for a number of years in mobile content distribution and had enjoyed attending MoMo meetups in Paris. Although our first meetup in Miami was about as well attended as the first RefreshMiami meetup, we held three more club meetings that year, including an excellent evening at Nokia Latin America’s Headquarters organized by Michael Tangeman. Michael and I fired up the club again this year and legitimized it by formally signing with the international organization. We’ve had some great events this year and club membership is growing. MoMoMiami meetups attendance averages about 45 people. Starting in August, MoMo Miami will be held on the first Monday of the month, unless we schedule a meetup adjacent to a local mobile conference. We are still  discovering our mobile ecosystem and are eager to meet you at one of our events.

Over the last few years, I had been talking to and exchanging emails with Chris Heuer, Founder of  the national organization of Social Media Club, about founding a local chapter in South Florida. There had been two previous attempts to set up a Social Media Club locally, but they had not panned out. I was working at Scrapblog at the time and would run into Chris at various web conferences, including Web 2.0 Expo in San Francisco and BlogOrlando. We shared an obvious passion for social media technologies and implications for business.

In the Fall of 2008, I founded the local chapter of the Social Media Club of South Florida and we started holding our monthly meetups, which have grown from an average of 30 people per event in the beginning to over 100 people recently.

Nearly a year later, the Social Media Club of South Florida is a dynamic community of professionals from all types of businesses who meet monthly to learn about social media best practices and case studies. Club meetups are scheduled for the second Tuesdays of the month and we’d love to see you there.

All of my work was social media related and I could see working professionals trying to understand the subject. For example, Scrapblog shared office space with one of the top 5 global public relations firms; I could see the PR professionals’ long-term progression in understanding social media, from initial dismissal to grudging acceptance to implementing social media initiatives for clients. I saw the same thing at the university, where I taught one of the first full-semester courses on the subject in the nation, to University of Miami School of Communication students majoring in journalism and in public relations (and workshops for professors). I had also co-founded a startup with Brian Breslin, StartPR, which provides an online hosted service for social media tracking and blogger relations.

As I stroll down memory lane, my thoughts are on:

Serendipity — How a single blog post changed the course of my life and opened up a whole universe of possibility and opportunity.

Community — The unique sense of belonging that only comes from creating opportunities for others.

Transformation — Not only in terms of personal growth, but in particular I’m thinking about the transformation of the community into a more welcoming region for technologists and startups. We’re not there yet, but it’s a far cry from three years ago.

Gratitutde –For the innumerable people and resources that came into place at the right time to make these initiatives possible.

The future — We’ve only just started building a viable technology future for the region; there are many more challenges on the way as we vie for the attention of our local media, of the city, and of investors.

One step at a time.

I enjoy SXSW because I get a chance to meet most of the people I read, follow, and interact with throughout the year. They are all here this week.

I’ve been to this conference twice before, and this third time’s the charm: I’m honored to share the stage with co-panelists Peter Imbres, Scott Monty, and Andy Carvin for a talk about “Digital Tsunami: Breaking News at Breakneck Speeds”:

The news about the earthquakes in China broke on Twitter. A fake email from Apple posted on a blog sent the stock tumbling 5% in twenty minutes. How is the modern media landscape affecting crisis, both humanitarian and for major brands? Discuss with those enabling it and victimized by it.

While here, I plan to live blog to the extent possible, although there aren’t enough power outlets …

If you’re at SXSW, I hope well meet up!

Last night we celebrated another great year of RefreshMiami meetups (slideshow here).

During the year, our membership doubled as we accomodated about 35 presentations by South Florida new media startups, entrepreneurs, and freelance professionals. Our meetups were attended on average by 50 people, with some events drawing about 100. We’re particularly grateful to Yahoo! Hispanic Americas and to Brikolodge for hosting most of our meetups, as well as to our sponsors for providing the catering.

What’s in store for next year?

As the new media community continues to grow, we plan on providing more services throughout the year. This means we’ll look into incorporating as a non-profit early in the year, building a team, and setting objectives. It has been a rewarding adventure so far, and we look forward to our next stage of growth.

Thanks for taking part!

It is a pleasure to join the bright group of creative catalysts Chris Heuer has assembled at AdHocnium. Over the last few years, I’ve had the opportunity and privilege to meet and collaborate with many in this group. I look forward to working with these very bright minds, including Adrian Chan, Adriana Lukas, Brian Solis, Chris Heuer, David Parmet, JD Lasica, Neville Hobson, and Tom Foremski.

As we near the year-end, the “way things are done” and “the things we hold dear” no longer seem to be accepted truths, do they? Judging from the troubled financial, real estate, automotive, and newspaper industries, among many others, our societies and businesses are going trough a sea change as we adapt to new economic realities and ways of thinking.

Our objective is to help our clients develop solutions and processes to steer through profound change:

By focusing on the end goal of innovation and transformation, we are not limited to social media solutions — we can think differently about business processes, branding, marketing campaigns, customer support, hiring, training, partnerships, sales and other aspects of operations even.

PRWeek covered AdHocnium this week, as did my colleagues Neville and David.

As with the others, I will continue as a freelancer and look forward to collaborating on new projects with them in our new collaborative association.

BlogOrlando gets better each year, I’m very glad I went. I of course enjoyed reconnecting with friends who flew in from across the country, seeing the Orlando tech community again, and meeting new people.

One of the highlights was getting firsthand case studies from the teams that manage(d) social media at major corporations: Jeff Rubenstein and Josh Hallett presented the Sony Playstation strategy; Paula Berg spoke about successes and learnings at SouthWest Airlines; and Jake McKee recapped his experiences at Lego.

The schedule was full of good topics, making it hard to choose which track to follow:

Leah Jones of Edelman Digital presented advanced search techniques, including the search engines and Boolean searches she makes. Here’s her presentation on Slideshare: “Going beyond Google”.
Nik Wilets, aka @tiburon, explained the difference between a photographer and a photojournalist, and had great examples of his own and other’s work. He was later followed by Etan Horowitz from the Orlando Sentinel, who spoke about the use of Twitter in Journalism.

Phil Gomes, also of Edelman, shared his experiences, tips, and techniques on giving internal education on social media within the large PR firm.
Spike Jones and Geno Church gave excellent presentations on “WOM and social media” and “Movements, activism, and social media”, respectively. Most interestingly, Geno spoke about creating and building the Fiskateers community, for one of the oldest companies in the world, Finnish scissor maker Fiskars. Community is not about the scissors, it’s about the higher purpose.

I’ve been going up to Orlando tech events, and each time it’s reassuring to see the tech community grow and organize itself. They’ve made great progress in the last few months since BarCampOrlando, which was the catalyst for many of the groups and initiatives. Pictured are Alex Rudloff, Ryan Price, and Gregg Pollack, who summarized the history and the many things going on. Here’s a video of their 30-minute preso.

I also saw David Alston from Radian6 speak about brand monitoring (disclaimer: I co-founded StartPR), but unfortunately missed David Parmet’s session on education and Jake’s session on identity.

Overall, it was great to meet up with such brilliant and engaged people, and best of all, it happened in Florida

Update: Some of the sessions are archived here on ustream.

We held our second MobileMonday Miami event last week!

Thanks to those who participated and thanks to Myk Willis, CEO and Founder of Myxer, who gave an awesome presentation of this fast-growing  mobile startup. Mobile Monday Miami co-organizer and co-founder Jeffrey Sass (pictured) graciously hosted the event at Myxer’s offices in Deerfield Beach.

MobileMonday is a global community fostering cooperation and business development through networking events to share ideas, best practices and trends in the mobile industry. We’re excited to create a mobile community in Miami and look forward to its continued growth. If you’re into mobile, you’re invited to attend and participate in our free events.

The next one will be on June 9th, 2008 at Nokia’s offices by the Miami Airport. If you’re interested in attending, please RSVP on the Facebook event page, or just get in touch with me.

miami blogger dinner at los ranchos, originally uploaded by alexdecarvalho.

Continuing what has been a stellar year in Miami in terms of online conferences, the The Word of Mouth Marketing University came to town. To welcome some our friends from out of town who came to speak at the event, including Rohit Bhargava, Joseph Jaffe, JC Hutchins and Jason Anello, we organized a blogger dinner last night:

Brian Breslin of infinimedia

Joseph Jaffe of Crayon

Jay Berkowitz of Ten Goden Rules

By the way, Josh Hallett snapped some great photos at WOMMU, some of which appear on WOMMU’s good live blog. Have a look!

  RefreshMiami Anniversary 
  Pictured: Kristen Taylor and Dan Rubin.

On Wednesday, May 2nd, we celebrated the two-year anniversary of RefreshMiami! When a few of us first met at a Starbuck’s in South Beach on May 5th, 2006 (Brian Breslin, Chris and Rebecca Saylor, Robert Murray and I), little did we know how significantly the RefreshMiami community would impact our lives. As Brian writes on the RefreshMiami blog:

“So its been 2 years. Wow. In the last 2 years I have either met or interacted with hundreds of great people in the south florida tech community. Lots of people have gotten jobs, made friends, and had a great time. So with that in mind, I think its time we celebrate.“

Celebrate we did! Here are some photos. Michael Tangeman compares RefreshMiami to the First Tuesdays and such of the early dot.com days (see also comments on his post):

“It is so refreshingly unlike the dot.com days here in Miami. No suits, no VCs just flown in from the Valley, no investment bankers looking to take somebody public, no lawyers handing out cards and wanting to get in on the deals. The talk is about technology and apps and projects and what people are up to, not about shares and options and exit strategies.”

If you’re new to Miami and looking to meet and connect with other web entrepreneurs, developers and designers in South Florida, here’s how to participate:

1) join the 220 member strong RefreshMiami Google Group for discussion on local tech issues, job postings and more;

2) join our group on Facebook;

3) if you’re on LinkedIn, we just started a group there. Here’s the link to join;

4) Subscribe to the RefreshMiami blog;

5) Come to our next meetup! Our next event is on May 28th in Coconut Grove … see you there!

There’s a packed house to watch Mark Cuban interview Michael Eisner: two billionaires in the room:

“This is a joint panel session for both SXSW Film and SXSW Interactive registrants, and will be a one-on-one interview with the founder of The Tornante Company and new media studio Vuguru, will feature the former head of Disney turned media mogul discussing his past, present and future endeavors, as he builds new companies and models for entertainment consumption. Interviewing Eisner will be former SXSW Interactive Festival keynote speaker Mark Cuban.”

Michael wanted to see if the time had come for story-driven professional content to be monetized on the Internet. Can contnt owners make money from content? It’s almost the time, but pretty soon this distribution channel will explode and it will be like what’s happened before: one plus one will equal three. He has seen this numerous time in his career. For example, the addtion of movies and television was bigger than either one alone.

Michael would like to say he has a research group figuring out what to do; he doesn’t. They’re trying things out. For example, he talked to Chrysler, who put him in a Nitro and said “go to SXSW and look young”!

The people working in online video will be the Spielbergs of the future. Michael says he has a talent for finding such talent.

Why do we see so many changes in business models by content producers on the net? Partly it’s because they know it will be huge and they want to get as big a slice of the pie as they can. This happened to Prom Queen, where distribution deals were renegotiated after it went big. There is no unique business model. That’s why all you can do is to find the people who are doing interesting things and raised $5 from family and friends to make their video.

What type of approach should content producers take? For one thing, Michael says, “Stay away from media moguls like me”. Those who get in a band with two other people, stay in a Day’s Inn and work on a shoestring see media moguls as a last resort. Then there’s the 12 year olds in the user generated arena, and you can sometimes see something pretty good. Michael is not interested. But the group that’s very interesting are those youth studying film production in schools: they are educated, smart and professional.

Of what you see online, 99% is awful and 1% is good. The intention is not to do crap, but it’s hard to know this before the fact. Lots of bad movies are made, but no one intended them to be bad.

Michael thinks that within 5 years, content on the Internet will be as important as content on television or cable. Already, content is a huge deal.

Will this be primary content or secondary content? It will be both. Nothing will be different, just the distribution channel. This will be media over broadband. Mark Cuban disagrees, though. People are rushing out to buy HDTV more than they are PCs. There are no standards. (Michael agrees that 90% of America that has TV on their PC are sitting in this room). Eisner says he doesn’t dwell on the technology. If there’s a story that makes you laugh or makes you cry, somebody else will want to see it and there will be a way to distribute it online. If you have the patience and you are interested in dealing with new people and new ideas, this is the place to be.

Question and answer

How will Eisner acquire a large volume of cool content? How will Michael upgrade the quality of content in volume? The point is to make a good show and you can have millions to perhaps a billion people watching it. If you know how to monetize this, then you have a business. Michael’s skill is in identifying good content. But talent agencies are looking for talent as well. This is becoming a business. As long as the cost is low enough, the talent acquisition and management business will grow.

Every new technology predicts the demise of the movie theater. Artistic decisions need to be made if you’re shooting something for HD … there’s way too much detail. Should content creators be making these decisions at the beginning of the process if they’re filming for the net? Yes and no. What’s hard to do is the emotion. If you have good emotional content with heart, it will work on any screen, including the big screen. So it’s a matter of cost and budget, during the production process. One of the best things of producing on the cheap is that you can redo it, if it works.

What’s Eisner’s take on Creative Commons and the remix culture? Michael says he’s conflicted, because he has a long history of defending copyrights. What sets this nation apart is paying people for intellectual work, which is just like paying people for physical work.

What about the growth of product placement as an advertising mechanism? It’s very important. In the creative process, it’s very important to have it done right, because bad product placement can ruin good content. Eisner objects to 30s pre-rolls. There’s a lot of experimentation going on, but the combination of sensitive insertions and voice overs can work. We’re used to advertising in entertainment, because most would prefers ads to paying a subscription. If you have common sense, you will understand what’s annoying.

Opinions about the added capabilities that digital brings to content (interactivity) and do these need to be integrated into the content creation process? This is the one thing that makes the internet totally unique. Eisner likes to have control over the content, but he likes the interactivity. It’s clever, compelling and works. He is adding interactivity to content, and admits he is not clever enough to think of all the ways to take advantage of interactivity. Mark mentions there are problems with interactivity. On the advertising side, there are no standards, so if you have different distribution channels, you need to encode each one specifically and think about how the players are different, so you can adapt the ads. Cables and satellite are gearing towards interactivity now. Mark is putting emphasis away from interactivity on the net and is moving to digital cable and satellites.

What about the published written word in the digital landscape? How do big media companies adapt? Michael says he has no idea. He says his Kindle died after about three days. He says the written word is the essence of everything he has ever done. It’s hard to go out and shoot and get lucky. He doesn’t believe the days of the written word is over. Mark thinks we’re approaching screen fatigue, and there will be a resurgence of book reading … rather than reading stuff on the screen. And there’s an excitement to getting out of the house and into the movies. So these media are not going away.