Once You're Lucky, Twice You're Good - review

Readers of this blog will know I ordered the new Sarah Lacy book, 'Once You're Lucky, Twice You're Good' and it arrived about a week ago.

I finished it today on the flight to Perth - so thought I'd throw a bit of a review together for anyone who was interested and is maybe considering buying the book.

I really enjoyed reading this book. Lacy is a great writer and structures the book in a way that makes it hard to put down, and it's a good resource for those who pay attention to the Valley/SF Web scene and also for those with only a passing interest ... the core theme of the book seems (to me anyway) to be the underlying motivations of the leading Web 2.0 entrepreneurs and what drives them.

What drives them appears to be making the next shit hot product ... not VC or going public ... they want to create something that makes a difference to users. With that in mind, it's no surprise that the book mainly focusses on the development side of things rather than the real world, business element. Huge valuations are thrown around ($8b for Facebook, $200m+ for Digg, $500m+ for Slide) with no real justification of why these companies are valued in the way they are.

For someone on the business side, this was frustrating ... they talked about the YouTube valuation of $1.5b back in 06 but there is minimal explanation that right now YouTube is still struggling to monetise its audience and content.

The book revolves around a few main characters.

- Max Levchin. Slide CEO, paypal founder, angel investor ... all round Silicon Valley key player
- Marc Andreesen. Netscape co-founder, Mosaic founder, Opsware founder and now Ning
- Jay Adelson. Revision3 Chairman, Digg CEO, Equinix
- Mark Zuckerberg. Facebook CEO and founder
- Kevin Rose. Digg Chief Architect, Pownce, Revision 3 - Diggnation.tv
- Reid Hoffman. LinkedIn Chairman
- Sean Parker. Napster, Facebook
- Ben and Mena Trott. Six Apart
- Peter Thiel. Paypal Co-Founder, VC, Angel Investor
- David Sze. VC
- Evan Williams. Blogger founder, Twitter

Those familiar with the above list will know it's a mix of initial dot com guys who had successes and new blood. The theme that links them is that right now in the Valley things have changed - there is a contempt (or at least cynicism) around venture capital ... and there isn't a single minded goal/desire to take the company public.

With the already successful guys (Andreesen, Levchin, Williams) there is a desire to show their peers that their first success wasn't a fluke. For Levchin (who is probably the star of this book) there is almost a single goal to make sure Slide is more successful than Paypal. What Lacy misses is that potentially Slide is just a fad ... and that when you compare it to Paypal right now, it seems a little irrelevant. There are pages dedicated to Slides dedication to building Facebook apps like Top Friends and Horoscopes and 8 Balls ... which to me seem irrelevant when compared to a revolutionary payment platform. Maybe I'm missing something ... (edit: Lacy does mention within the book that perhaps Slide isn't the game changer PayPal was ... however in my opinion doesn't flesh this out near enough)

I really enjoyed reading about Digg and the Jay Adelson, Kevin Rose dynamic. Some of the best parts of the book are the two recounting the talks they'd had with other companies to acquire Digg - amongst them Yahoo, Newscorp and even Al Gore.

From reading this book, and being in San Fran earlier in the year, it is a very exciting time in the web world. Plenty of innovation, sure, but also realism. This book I think could do more to talk about the business reality of some of these Internet plays - I think at times Lacy seems to show a distaste for the 'blue shirt MBA guys' and admiration for the tech, coder types.

My thoughts are the two need to co-exist and great web businesses acknowledge this in all aspects of the business. Maybe I am missing what the general feeling is in the US right now ... but with the likes of Slide, Ning, Digg etc it seems the logic behind them is build a great product, generate a strong userbase and then monetise.

Problem is, there is no shortage of great web tools/properties with large audiences ... the problem that will force many of them out is not being able to properly monetise their audience. I think this is a valid challenge of Web 2.0 and one not being acknowledged ... especially if the new breed (or the old breed's new projects) are determined not to repeat the mistakes of the past.

I would even argue that smart Biz Dev guys are more important than ever now - and in short supply.

Still, I recommend this book to anyone wanting not only an insight into these companies, but an insight into where the web is heading.

Top 5 moments ...

1. The conditions (alleged) Mark Zuckerberg places on his girlfriend in terms of dates per week and how much time he gets to himself. Zuckerberg actually comes across as a bit of a douche in the book I think.

2. Kevin Rose talking about buy out talks with Al Gore.

3. That Ross Levinsohn - former head of Fox Interactive Media - wanted to buy Digg ... the Digg guys met with Rupert and the Newscorp bigwigs, Digg wanted to sell, Levinsohn was dead keen on the concept ... but an offer never came. Weeks later Levinsohn bailed from FIM ... you have to wonder what could have come out of a Myspace/Digg product.

4. Jay Adelson's description of his days at Equinix are actually quite sad ... you don't really know if it was naive optimism or gritty determination that kept him at a company that seemed determined to burn him.

5. Reid Hoffman. Seems like a good guy and potentially is sitting on the most valuable product of them all in LinkedIn

Buy from Amazon - http://www.amazon.com/gp/product/1592403824/ref=cm_cr_pr_product_top

Ad:Tech SF - Day 3 - Update 2

It's just gone 6pm here in SF ... I have literally just walked out of the closing keynote (which was awesome) and am in the hotel summarising the afternoon. I have to say Ad:Tech was an incredible experience and I really feel I have learnt more here than I have for a long time. The downside - I now know how far behind Australia is in the digital media world in terms of approach, views and execution - I think together we all have a long way to go ... the upside is we have great technology and content to do it with and I feel an understanding of the challenges at hand.

So, onto the sessions.

2:15: Finding, Grooming and Keeping Your Digital Sales Talent

I think working on agency side you really have to have a solid understanding of what motivates sales people and the challenges they face, and I hope (but doubt) that sales people have same interest in agency side ... so this was a good and pretty topical session. It was also interesting as I worked sales side for 3 years and crossed over to the agency side ... which from the discussion would see me in the minority ... in the US a lot of sales roles are being filled by agency people.

It was discussed that the lack of sales talent was indeed a 'crisis' ... where we had a lack of talent, burnt out sales people finding new things to do, and people being paid more than their true value. I would have to agree with all three. It was agreed money wasn't everything - there are other motivations ... most people want to work for a progressive, winning company ... so I guess you can pay your salespeople all you want, but if all they are motivated by is money then they'll split as soon as a better offer comes unless you can make them feel wanted beyond salary.

The idea of 'digital sales' was discussed ... and what is more important ... 'digital' or 'sales' ... it was commonly accepted that you can TEACH digital media to a good sales person ... but that person must have that balance of intelligence and aggression (or motivation) that defines a good salesperson ... Jennifer from MEC (who like myself had been sales and moved to agency) also said for an agency person it is important for their sales rep to have a fundamental understanding of marketing and essentially solving the problems strategically briefs put forward.

As this was an open discussion I chimed in and voiced my frustration that I don't find (generally) that the sales people I deal with are what I would consider 'trusted advisors'. I stated that ideally I wanted to be a trusted advisor to my clients but sales people (in Oz anyway) find it very tough to hold a conversation about the industry outside of their four walls. Personally (and I don't mean to vent) this is absolutely ridiculous ... how can you work in an industry but not really care about it or want to learn about it? Worst still, what are publishers doing to educate their staff in the wider world of MEDIA ... not just revenue growth areas and sales targets ... this is a responsibility of sales directors, and to be frank no one is doing it well at all.

There was a rebuttal to my comments from a sales director from over here, citing the fact that a lot of agencies don't provide adequate briefs or feedback. I completely agree - and some agencies are as to blame for this lack of communication that would be extremely beneficial to improve responses moving forward. I used the Maudsley analogy, "put shit in you get shit out" which got a few laughs. See Mauds, your legacy is extending across the Pacific.

Lastly the question was raised of where the next generation of digital sales people will come from? It was generally accepted that publishers need to look beyond
- poaching
- agency side
- traditional media

... and look at areas like tech, enterprise and software sales people. These are charismatic, intelligent people selling a sophisticated product and generating results. Personally I agree.

The only downside of this session was it would have been handy to have it on retaining and attracting strong agency staff - I think everyone is facing the same issue right now.

3:30: The Mid Tail and The Promise of Engagement

This was supposed to look beyond CPMs and standard ad units and look at how to truly engage using the mid-tail of sites ... ie sites that sit outside the top 100 (0ver here) but offer a resonable and most importantly engaged audience.

There were speakers from Gorilla Nation, AdBrite and Traffiq and honestly I thought this was the weakest session aside a couple of interesting, albeit general, zingers.

Essentially these providers are vertical networks with a overriding ROI premise - reach a large audience off one buy in contextually relevant areas ... so essentially what they DO specialise in is standard ad units and metrics. I am not sure how this missed the mark so badly but I think the core issue was having a panel that didn't really have the answers about measurement beyond what we already know.

It was the first time I'd come across http://www.traffiq.com/ and I think the concept is pretty interesting - as an ad marketplace platform with some pretty nifty audience information.

A few decent points

- Audiences essentially care about content. Advertisers care about audience. Neither really care about 'publishers' ... especially large ones. People don't watch the AFL Grand Final because it's on 10 do they? No ... they watch it because of the content regardless of who it is on.


- Mid tail or ANY sites with a sizeable and valuable niche audience need to protect the value of the audience as this ultimately gives the publisher the latitude to charge what they want to. If they start accepting any old 'punch the monkey' type rubbish creative ultimately it will impact yield. They can't have their cake and eat it to. Myspace take note.


- 'Drinkers unhappy with booze prices might open their own bar.' I think I have probably ballsed up this analogy but essentially what they were saying was that advertisers may become jack of paying high or unreasonable CPMs to reach their audience, and they will set up their own content area and utilise large amounts of SEM and sophisticated SEO to actively compete against sites they once advertised on. Baby Center is an example of this with Johnson & Johnson. Also look at Map My Fitness for Special K on ninemsn.

I guess it wasn't all bad as a session, but it kind of felt like the same sort of discussions that have been circulating for years.


4:45: Closing Keynote: Internet Superstar: Live At Ad:Tech

Internet Superstar is a show on online TV provider Revision3 - http://revision3.com/ - which is billed as the TV Station for the Internet age ... they have a whole heap of shows including Diggnation and Tekzilla ... to be frank I had only briefly heard of them and see a couple, but their numbers are strong and the content is cool. They filmed Internet Superstar live for the last Ad:Tech session with an array of special guests.

Check them out at http://revision3.com/internetsuperstar/ - it's sort of like Wayne's World but funnier and less mullets.

We had ...

Kevin Rose from Diggnation and Digg. This guy is pretty big over here. Diggnation gets around 250,000 views a week ... and Rose is worth approximately $60m as a co-founder of Digg. He is also co-founder of Pownce and a load of other start ups ... and he is always featured on Valleywag, who allege he is nailing all kinds of San Fran and surrounds tech-babes.
http://www.diggnation.com/ ; http://www.digg.com/

Kent Nichols from Askaninja.com. This show is hilarious and very clever. It does over 800,000 views a week - which is staggering ... and they have been approached to work on theatrical projects as writers.
http://www.askaninja.com/

Jeff Macpherson from Tiki Bar TV. http://www.tikibartv.com/tikibar_podcast.html

Gary Vaynerchuk from The Wine Library - http://tv.winelibrary.com/ - This guy is on the verge of becoming a proper celebrity over here ... he's early 30's from Jersey and loves wine. He has already been on Ellen and Conan O'Brien and he is awesome. Charismatic and extremely passionate about wine. He sort of reminded me of a younger, less gangster Joe Pesci but the guy has star written all over him.

When seeing these people speak I kept thinking - where are these people in Australia? Sure, we have some 'online TV presenters' but most are boring and flat and I challenge most producers of said shows to watch them in their own downtime ... these guys in the US MAKE you want to watch their programming ... they twist TV on its head and give you cool content you can't get elsewhere and in a way that makes use of the medium. Watching something like askaninja made me think that people like MTV and Spike would KILL for this content ... even something like Diggnation ... this is the TV that should be on the TV. It makes you sad that both Channel 9 and 10 thought it'd be awesome to run 1 hr show formats of funny youtube videos ... and that 9 is bringout to screens a show based on a campy Japanese game show that had a funny 3 minute video on YouTube that got a few office chortles.

Not a lot was discussed about how these shows are monetised (aside saying that askaninja.com brings in around 1.2m USD per year in gross revenues) ... but the vieweship across all was pretty solid. It won't be long until an Internet show has over 1m viewers a week over here. And numbers I think cloud the real benefit - fantastic niche content viewed by an enthusiastic, engaged and vocal audience.

That's a wrap

So what are some of they key Ad:Tech take outs ...

- There are more affiliate networks than anyone could possibly consider regardless of whether they worked 24/7 for the next 100 years
- Internet TV such as Revision3, Ask A Ninja and Hulu are crossing over here - will it happen in AU?
- Measurement is a real focus area for agencies and clients but not so much for publishers
- Social Networks are widely a mystery in terms of marketing use and the impetus is on the networks themselves to make sense of when their unique proposition really is
- TV isn't dead - far from it. It has evolved
- The agency side has a tough ride ahead in adapting to the new media landscape - creative, media, measurement, client service, staff, training. "It will be bloody" said one COO of a large US agency.
- Robust growth will continue - some are quoting 100% growth over the next 2-3 years


So that's it - hopefully all those who have invested the time in reading this found it useful. Thanks to MindShare for giving me this opportunity, it has been an amazing experience and a real professional highlight.