Searching Digital Video

I spoke to a group of educators recently and demonstrated a dozen or so powerful web based tools that anyone can use to do research and stay current on virtually any topic. One educator was concerned that only about 15% of students are self-learners, and that the power tools I demonstrated might not help the rest.

I suggested that instant messaging and social networks could help the other 85%. Self-learners could interact with others and provide them with help and guidance that they need.

But a much better answer to this problem may come when Google, Microsoft and Yahoo provide search engines that will index (eventually) millions of hours of video footage. In the future, the self-learners will be able to identify video clips that clearly teach concepts and then share those clips with non-self-learners.

One of the coolest ideas that came during the bubble but never materialized was the vision of Microstrategy founder Michael Saylor who pledged $100 million to create a free internet-based university, where thousands of the best and brightest teachers and experts and world leaders would lecture on every conceivable subject. These video lectures would be offered free to anyone. Imagine how powerful a learning tool this would be if this content were all indexed by Google’s video search engine.

Saylor’s personal net worth went from about $13 billion to just millions when Microstrategy’s stock crashed doubly hard in 2000 from accounting irregularities and the bubble bursting. But today the company’s market cap is back to $1 billion. It appears from Yahoo! that Saylor has sold much of his stock, so I don’t know what his net worth is today or whether he’ll ever resurrect the Internet University idea.

But I hope someone will take advantage of the powerful new video search tools that are just around the corner and amass content that could help billions of people learn about any subject from video. I definitely hope our Infobase Media Corp. will play successfully in this arena.

When I attend computer industry events (like the Consumer Electronics Show) and when I read news about content (paidcontent.org is the single best source online), it seems that 95% of it is centered on entertainment: music, Hollywood, and computer gaming.

I wish more business and government leaders would have Michael Saylor-like ideals about using technology and content to change the world in a positive way, to help hundreds of millions of people improve their lot in life. But alas, the siren song of fantasy and escape enslaves billions of couch potatoes worldwide. The best book I’ve read about how television destroys our culture is Neil Postman: Amusing Ourselves to Death: Public Discourse in the Age of Show Business. I just ordered two more books by Postman: How to Watch TV News, and Technology: The Surrender of Culture to Television.

I’m actually slightly optimistic that just as the interactivity of the Web has caused many young people to watch less and less television, the interactivity and empowering nature of a Google-like index to video archives will make video a tool of learning rather than the mesmerizing, time-wasting sink that it often is.

Abraham Lincoln, October 3, 1863 Thanksgiving Day Proclamation

The year that is drawing towards its close, has been filled with the blessings of fruitful fields and healthful skies. To these bounties, which are so constantly enjoyed that we are prone to forget the source from which they come, others have been added, which are of so extraordinary a nature, that they cannot fail to penetrate and soften even the heart which is habitually insensible to the ever watchful providence of Almighty God. In the midst of a civil war of unequalled magnitude and severity, which has sometimes seemed to foreign States to invite and to provoke their aggression, peace has been preserved with all nations, order has been maintained, the laws have been respected and obeyed, and harmony has prevailed everywhere except in the theatre of military conflict; while that theatre has been greatly contracted by the advancing armies and navies of the Union. Needful diversions of wealth and of strength from the fields of peaceful industry to the national defence, have not arrested the plough, the shuttle, or the ship; the axe had enlarged the borders of our settlements, and the mines, as well of iron and coal as of the precious metals, have yielded even more abundantly than heretofore. Population has steadily increased, notwithstanding the waste that has been made in the camp, the siege and the battle-field; and the country, rejoicing in the consciousness of augmented strength and vigor, is permitted to expect continuance of years, with large increase of freedom.

No human counsel hath devised nor hath any mortal hand worked out these great things. They are the gracious gifts of the Most High God, who, while dealing with us in anger for our sins, hath nevertheless remembered mercy.

It has seemed to me fit and proper that they should be solemnly, reverently and gratefully acknowledged as with one heart and voice by the whole American people. I do therefore invite my fellow citizens in every part of the United States, and also those who are at sea and those who are sojourning in foreign lands, to set apart and observe the last Thursday of November next, as a day of Thanksgiving and Praise to our beneficent Father who dwelleth in the Heavens. And I recommend to them that while offering up the ascriptions justly due to Him for such singular deliverances and blessings, they do also, with humble penitence for our national perverseness and disobedience, commend to his tender care all those who have become widows, orphans, mourners or sufferers in the lamentable civil strife in which we are unavoidably engaged, and fervently implore the interposition of the Almighty Hand to heal the wounds of the nation and to restore it as soon as may be consistent with the Divine purposes to the full enjoyment of peace, harmony, tranquillity and Union.

In testimony whereof, I have hereunto set my hand, and caused the seal of the United States to be affixed.

Done at the city of Washington, this third day of October, in the year of our Lord one thousand eight hundred and sixty-three, and of the independence of the United States the eighty-eighth.

Abraham Lincoln.

(More on the history of Thanksgiving Day from worldhistory.com)

Omniture Co-Founder Spoke at BYU

John Pestana, co-founder of Omniture, the world’s leading provider of enterprise-level web analytics, lectured on the importance of web analytics at BYU earlier this month. (View his entire lecture here)

As John said, this is a hot field. Anyone who studies and masters marketing and web analytics can do extremely well as an internet entrepreneur or key player for a larger ecommerce concern.

I have been studying web logs since 1996, designing online reporting tools since 1998, and utilizing commercial web analytics programs to make informed business decisions since 2002. I don’t think I exxaggerate when I say that every successful internet entrepreneur and marketer that I know has relied heavily on web analytics to make good decisions.

Everyone has an opinion about everything, most of all web design. But if you live by the numbers and test and measure everything, then over time your web site will perform better and better, you won’t make missteps, and before you know it, you’ll be generating significant revenue.

Besides the Pestana lecture, I came across an introduction to web analytics from the very smart folks at Future Now Inc a couple years ago. The PDF download is really a marketing brochure to sell a $99 guide to web analytics, which I haven’t purchased. But the “brochure” is free and introduces you to some important concepts.

I don’t think I’ve yet purchased a book on web analytics, but I’ve actually considered writing one.

Inspired by Warren Buffett

I’m 150 pages into The Warren Buffett Way: Investment Strategies of the World’s Greatest Investor, a book that was published ten years ago that I bought onsale for $5.98. I have been slowly and carefully studying this book, marking it up, and writing each big idea that I find inside the back cover, in good Tim Sander’s fashion. I truly want to understand why Warren Buffett has succeeded.

Here are a few of the key points so far (I have highlighted more than 100 key ideas):

  • Insurance companies make most of their profits from their investments, not from writing policies. The most important role in an insurance company is Chief Investment Officer. Buffett has been really big in insurance for decades–now I know why. Investing the cash flow well creates large fortunes.
  • Buffett says, “I am a better investor because I am a businessman, and a better businessman because I am an investor.” He doesn’t play the stock market or focus undue attention on macro economics and government reports to time his purchases. He buys stocks with intrisic value with the long term in mind. He said the nine most important words ever written about investing are from his mentor Benjamin Graham: “Investing is most intelligent when it is most businesslike.” When you invest in a company, you own part of a real company, not just paper for trading. Therefore, know everything about the business when you invest in it, as if you were the CEO.
  • Invest only within your circle of competence. What this means to me is that while Buffett avoids high-tech stocks, that is all that I know. My holdings would be entirely different from Buffett’s. But my expertise in internet marketing and online business models will inform my decisions, so I can have a “margin of safety” and know that a company’s value is greater than it’s current stock price (based on an informed model showing net present value of future earnings) before making any purchase decisions. Last year, I bought Audible.com at $0.58. From my experience in internet marketing and online subscription business models, I knew that they were just about to turn the corner. By avoiding bankruptcy and because of their franchise value as the defining player in the field of digital audio books, their value would skyrocket. The company reported their first profitable quarter in 24-25 quarters and the stock started picking up. At the end of the year, I sold Audible for about $4.00, locking in a nearly 600% return in just a few months. But why did I sell at that time? I made no calculations projecting future earnings potential. I didn’t build a financial model as Buffett would to show whether or not the stock was overvalued. Instead I sold just because I could. Today Audible.com is trading north of $27.00. I blew this one, because I didn’t do it the Buffett Way.
  • As an investor, inactivity is good. Sloth and lethargy are literally his strategy. He doesn’t believe in trading stocks continually just because you can. He says all of his success can be traced to a small number of investment decisions in his life. He says we should act as if we are each given a punch card in life and we can make 20 trades in our life. That’s it. Not hundreds. Not thousands. But twenty investment decisions. If we take this approach, each investment decision we make will be informed by a deep knowledge and understanding of the company’s financial statements and economics and the management team.

In all my years of business and limited experience in investing, I’ve never before taken time to understand Warren Buffett. Now that I’m studying his approach to investing, I want to learn even more. Next April 30, Berkshire Hathaway holds its annual stockholder meeting in Omaha. I understand that 15,000 people flood into Omaha each year for this annual event. I’d love to attend.

Question #1: Does anyone know if this event is only open to Berkshire stockholders? Or is it open to the general public?

Question #2: Besides the book I’m studying, what is the single best source of information on Warren Buffett’s approach to investing? (I intend to study some of his recent annual reports, which are available on the Berkshire Hathaway website.)

Trivia Item #1: Warren Buffett’s father Howard was a stockbroker-turned-Congressman from Nebraska.

Trivia Item #2: Overstock CEO Patrick Byrne’s father was close friends with Warren Buffett and was president of GEICO insurance from 1976-1986 (one of Buffett’s major holdings.)

Link #1: If you want to spend an incredible hour, watch the streaming video of Patrick Byrne speaking at BYU earlier this year. He claims that Buffett taught him some of the most valuable lessons of his life.

I look forward to your comments.

P. AllenBlogger

My First Use of Google Answers

I was pleased when Google launched its Google Answers service way back in 2003. It is a remarkably simple and powerful tool when you can’t find an answer to any question on the world wide web. I’ve searched the answer database and found some pretty interesting questions and answers, but today I used it for the first time to post a question:

I’m looking for the leading classical music labels in the world.

I’m pretty certain that I could spend a few hours online or in the local university research library and come up with a pretty good list myself. But to save time, I’ve offered $50 if someone else will do this research for me.

I’ll report later on how this test goes. A recent article by Linda Arret in Info Today suggests that Google Answers is declining, not growing, and that other online reference services have not fared well.

“Few companies on the Web have more exposure or marketing clout than Google. Yet with over 200,000,000 searches per day, it never has attracted more than a couple of hundred questions per day to Google Answers and, in recent months, the average has dropped down to around 60-70. Granted, you do have to pay for the service, but at an average fee of $15- $20 hardly seems much of a barrier. However, the most compelling evidence that marketing can only help so much is the untimely demise of live reference services such as WebHelp and of the commercial reference market in general. Many of these services spent millions of dollars of venture capital money on marketing. WebHelp even put up a giant, two-story-high neon revolving sign on the busiest street in Toronto, as well as banner ads all over the Web. While those antics may have bought some traffic for awhile, it was not enough to make for a sustainable business model and today all are gone–along with the millions spent trying to market their services. The limited traffic at Google Answers and the demise of well-funded commercial reference services on the Web raise some serious questions about just how much people really need or want reference services online–no matter how well marketed–at least in the ways we have offered up until now.”

So I’m not extremely confident that I’ll get my question answered, but I still think it is worth a shot.

I think Google Answers has significant potential.

They could figure out a way turn some of the 200,000,000 daily queries into questions (like Ask Jeeves) with a text link that says, “Have your query answered by an expert”. Then Google users could be post their questions on Google Answers (after setting up an account, of course). But this is many steps and may just get in the way of the super-efficient paid click revenue model.

Perhaps a better suggestion is that Google Answers launch an affiliate program that incentivizes (some people use the word “incents” but I looked it up and “incentivize” is the proper word according to dictionary.com) other web reference web sites to tell their users to submit questions to Google Answers. The referring web sites would then share in the revenue from Google Answers. (I don’t know how much Google pays to the researchers, though, so this would lead to a three-way split and may not be very profitable.)

Agilix Seeks Interactive Marketing Manager

Agilix, a profitable Utah company that received $4.35 million in VC funding earlier this year, has posted this job opening:

INTERACTIVE MARKETING DIRECTOR

Growing software company seeks to fill critical Interactive Marketing role to accelerate growth through email and web-based marketing activities. Requirements: 2 – 5 years experience with email campaign management, copy writing, web site analytics & reporting, ecommerce promo systems, HTML and Photoshop knowledge a plus. Send cover letter, writing samples, and resume to resumes@agilix.com. No phone calls.

Benefits of Blogging

Yesterday my blog turned one.

On November 21, 2003 I blogged a suggestion to Google’s founders that they should launch a desktop search engine before Microsoft could incorporate their planned desktop and web search engine in Longhorn. (I’m very happy to say they have done this, and would have, with or without my blog!)

I’ve had a lot of fun over the last year blogging about technology and business. In fact, writing is now the funnest thing I do. It forces me to concentrate on one topic and at least try to say something that will be intelligible and meaningful to others. It leads me to pay far more attention when I’m reading. I’m continually looking for new information and for opinions that I either agree with and want to endorse or disagree with and explain why. I think it has helped me think and communicate more clearly.

In October, my blog had more than 25,000 visits. Several times a week I receive comments or emails from people who have read my blog and appreciate my efforts. That is gratifying.

As I think back on the past year of blogging and the new people I have met as a result, I think back to America’s original blogger, Benjamin Franklin.

Franklin is one of my heroes. His success in life began as an printer and then author, daily churning out his thoughts and ideas, sometimes under his own name, and sometimes in disguise.

Franklin spent the first 40 years of his life in printing and business. He made a great deal of money. Then, he spent the last 40+ years of his life in public service.

He was postmaster general, member of the Continential Congress, and ambassador/minister to France. But all his life (according to a recent biography I listened to from Audible.com on my iPod) he signed his name

B. Franklin, Printer.

I think I know why.

Words are powerful. According to scripture, they are more powerful than the sword.

Through the power of the press, Benjamin Franklin helped rally a nation to fight for independence from the British crown. He had helped Thomas Paine emigrate from England in October 1774. With some assistance from Franklin, Thomas Paine went on to publish the pamphlet Common Sense, which more than any other tract rallied Americans (including George Washington) to fight for independence. It is reported that more than 500,000 copies of Common Sense were printed in a nation of just a few million people.

A great nation was formed by the power of words and the freedom of the press which gave expression to those words.

Now I know what you are thinking…”I knew Benjamin Franklin, and you are no Benjamin Franklin.”

But like Benjamin Franklin, I have begun to taste the benefits of writing and printing, albeit my printing is electronic and global, not paper-based and local.

Because of my blog, I have been asked to write a column for Connect Magazine, circulation 9,500. This monthly magazine reaches many of Utah’s high tech business leaders. I have a feeling, too, that I will be writing books soon.

Because of blogging, I have gotten acquainted with dozens of talented business people, internet marketers, and even angel and venture investors. Recently I got an email from an EIR (Entrepreneur in Residence) from a very prestigious Silicon Valley venture firm. He said he had read nearly all of my posts and wanted to meet next time I’m in the Bay Area.

How valuable are these new connections? They are priceless. In some ways, because it helps me form connections with like-minded people all over the world, blogging may be the most important thing I do.

But like some other good habits I have developed over the years which are hard to teach and harder yet to convince others to do (like taking notes at every meeting you attend, and storing all your personal knowledge in a searchable database), I have a very hard time convincing anyone to start their own blog. Most think it would be a waste of time.

But for me, as I said before, in many ways, this is the most important thing I do. That is why I will sign off, respectfully yours,

P. Allen, Blogger

Wrap Up For This Week

Today I spoke about Raising Capital From Angel Investors at the Miller Innovation Center in Sandy, Utah. If you are starting a company in Utah, you should consider getting office space and other services from this group. The companies I know there are very happy with the business accelerator services there.

Other Infobase Ventures updates from this week include:

  • Infobase Media Corp. finished the gold master for the new 2005 LDS Collectors Library CD ROM (done in partnership with Deseret Book) and duplicated 20,000 copies, which arrived this week and should be in retail stores shortly.
  • Infobase Media Corp is researching an audio recording project for several hours of audio each month in each of 10 languages. (If you know of a good recording studio or audio engineer, please let me know)
  • Last Friday Directory.net closed on an additional $150,000 in funding.
  • This week Directory.net launched its Searchability (TM) search engine optimization service with its first partner
  • 10x Marketing held a board meeting. The company has been profitable for 12 consecutive months and is considering raising capital for expansion into other markets, including international.
  • iCount.com is close to launching its initial social networking features for political activists; the company has also determined which initial revenue stream it will pursue.
  • Utah Angel Network will be changing its name, most likely to FundingUtah.com, and will be launching its initial web site in December. This will be a free matching service for Utah entrepreneurs and investors.

All in all–a very eventful week.

Customized Feeds on My Yahoo!

My sister told me that she recently customized her Yahoo desktop so that all of my latest blogs would show up. So I did the same thing. It’s amazing to see my posts show up on My Yahoo right next to CBS Marketwatch news and Reuters Internet news. (I wish I knew how to post images to my blog–I’d show you a screenshot.) I’ll be adding my other favorite bloggers (besides me!) to My Yahoo soon.

Angel Investing and Venture Capital

A new report from the Center for Venture Research (New Hampshire) reveals the amount of angel investing and venture capital investing in the U.S. last year. The San Francisco Business Times article says:

Last year, angels invested an estimated $18.1 billion in 42,000 deals, down from the historical average over the last decade of $30 billion invested per year in 50,000 ventures, according to figures compiled by the Center for Venture Research at the University of New Hampshire. By comparison, last year venture capitalists invested $18.2 billion, according to the National Venture Capital Association. But only 2 percent of that money went into seed or early-stage investments.

This is the key problem for most entrepreneurs. Most are not ready for venture capital. They need angels to back them early on and help them grow to the point of being ready for venture capital.

Yesterday I attended the NASVF (National Association of Seed and Venture Funds) conference in Salt Lake City at the Grand America hotel. This is an organization that focuses on early stage investing, whether it be from angels or early stage VCs. The conference was outstanding.

Keynote

Guy Kawasaki was the keynote speaker at lunch. As always he was outstanding. (He signed a copy of the Art of the Start for me. If you are an entrepreneur, you must read this book.)

How to Raise Your First Venture Fund

I attended a session on how to raise your first venture fund–a very difficult task. Greg Warnock of vSpring explained in detail how vSpring raised its first $120 million fund, from three main groups–private entrepreneurs they knew ($20 million), then SBIC funds ($70 million), then institutional investors such as Zions Bank, Wells Fargo, and Merrill Lynch (the remaining $30 million).

Angel Investor Groups

Bill Payne discussed Tech Coast Angels, a network of three angel groups based in Southern California that has 220- members who have invested $51 million in 80 companies. In this angel investment group model, each member pays $1,500 in annual dues; each venture associate pays $3,000 and sponsors pay $4,000.

Scott Frazier from Utah Angels described how this group of friends meets for social as well as financial purposes, and they have invested $13 million in 32 companies since 1997.

John May spoke about a managed angel investment fund called New Vantage Group which he runs. As fund manager, he does much of the screening work on potential investments. Members meet often and get to vote on which deals get funded. This is more like a venture fund — it charges a management fee of 2.5% and a carry interest similar to a venture fund.

All three angel groups seem to be generating good returns (I would say the average IRR sounds like about 19-20%) for investors, despite a few failures in each portfolio.

Civic Entrepreneurship

Will West and Ken Wooley, two Utah entrepreneurial luminaries, sat on a panel which discussed how to get entrepreneurs to give back to society (answer: “ask them”), and how to create civic entrepreneurs.

Will has raised about $200 million, or about 12% of the total private equity ever raised in the state of Utah. He said almost 98.5% of it came from outside the state. Two of his successful companies are STSN and Control4. Will sits on the Utah Fund of Funds committee which will appoint a manager to disperse about $100 million in state funds to venture capital firms who can give the state a good return and will be likely to invest some of these funds in Utah.

I’ve not met Ken before, but I blogged a few months ago about the IPO of Extra Space Storage, which I believe raised more money than any IPO in Utah history. He said yesterday that he started that company 25 years ago and is the chairman. Ken was also involved in Megahertz and started Mountain West College (a for-profit school) and he currently has 6-8 angel investments.

Every community needs successful entrepreneurs who are civic minded and try to make the world a better place. Utah is lucky to have Will West, Ken Wooley and others who are so desirous to give back.