Automattica II

O'Reilly has a neat post on using WordPress as a general purpose Content Management System. Check it out here.

Automattica I

(FYI: Automattica is the term I am going to use when I post on stuff related to Autmattic, a company I work with and whose funding was just announced.)

Fun Business 2.0/CNN article about Automattic CEO Toni Schneider here

Just Another Day in New York

Taking the train back up to Boston after a spectacularly beautiful day with my wife (look ma, no kids!) in New York City.

Other than a deep strategy session last night with a portfolio company (read: late night drinks on the rooftop deck) and one quick meeting in the morning with a pretty darn interesting startup (yep, you guessed it –  an online video startup!) it was all play for the remainder of the day today.

Just for fun we stopped by the Peninsula Hotel restaurant at mid-day and, as I suspected, saw my friend and advisor Scott Kurnit holding court.

We managed to pull the rip off with only one brief shopping stop — Modell's on 42d Street. My wife, still angry with Red Sox brass for trading Johnny Damon (she had a crush on him), bought herself and each of the kids a Johnny Damon Yankees jersey. Heresy for a die hard Red Sox family! We'll see who she brainwashes into putting a Yankees jersey on.

I picked up a pair of Celtics-green Chuck Taylor hi-tops. They'll go over big back in Boston…

Unplugging now to turn back to my book, Ghost Soldiers.

Broadband Video Everywhere

Seems like everywhere I turn is some mention of broadband and/or mobile video. Whether it be startup business plans, major announcements, blog posts or news stories, it sure seems like this has become the latest "big thing" to talk/write about. I am not sure whether to be excited or worried. Probably both.

The big news, of course, was last week's announcements by Disney and Fox. Much has been written on those — and I am hoping to post a synthesis piece tying together the various themes in the discussion over those announcements. Haven't had time yet but will get to it soon.

I had heard at the Cable Show, and saw announced today, that yet another video-sharing site, Veoh, is getting funded. Please feel free to rant at me if I ever become the10th VC to fund a video-sharing site. I won't go so far as to say I am a skeptic, but I think it will be fascinating to see if/how YouTube and its brethren find a viable business model. As a side bar, PaidContent points to this amusing parody of the kung fu battle amongst video sharing sites.

Which brings me to what I think was a more interesting piece in yesterday's Wall Street Journal (sorry, subscription required) explaining how consumer packaged good companies like Kraft, P&G and Unilever are, despite initial reluctance, now turning to web advertising in a big way. Yet another indication that the Internet advertising economy will continue to enjoy robust growth.

Of course, I must confess one reason I liked the article is that it made very nice mention of some of the successes Heavy.com has had with major advertisers like Unilever.

But it also reinforced one of the reasons why I've spent a good chunk of the last 12 months in and around broadband video — because, although a still nascent (at least until a few weeks ago) category, it is clear that there is alot of money to be made in broadband video by those who understand how to develop content that is at once wildly popular with its consumer audience while also a wildly valuable medium to its advertiser audience. 

This is precisely the challenge YouTube et al. are grappling with. As summarized in a USA Today article this week, "[YouTube] expects to reap ad revenue in the first half of this year but is cautious. To remain relevant, it needs to serve paying advertisers without looking like a sellout to its millions of average users."

The difficulty in executing this strategic balance is exactly why I quickly got so intrigued with Heavy.com in the first place last fall. While the Heavy guys cleary have a knack for developing, and eliciting from their user base, compelling video content that their audience keeps coming back for in droves, they were one of the first groups, I think, to really crack the nut on monetizing the "young male edgy humor/satire" category. They have developed a distinct voice/personality/brand, and it is precisely this same personality that appeals both to their users and their advertisers. A tricky but powerful thing to pull off.

I am one who tends to believe that a rising tide lifts all boats. Lest we forget, AdSense not only created the defining business model for Google, but it also created the defining business model for the entire Internet search category.

So, while it is both exciting and scary to see so many broadband video sites getting funded and/or launched, I nonetheless continue to be encouraged when I learn that major advertisers like P&G and Unilever are substantially increasing their budget allocations to sites (like Heavy) who understand how to deliver them a product they need and value. 

Here's to wishing lots of success and ad dollars to the whole sector! 

Blogging on Amtrak

Happily armed with my Verizon Wireless card, laptop and latest & greatest hosted service from WordPress.com, I am getting a kick out of blogging on the train down to NYC. Not sure why I am getting a kick out of it, but I am so humor me.

Part of it is that my wife is sitting across from me.

(We are sneaking a couple days away in the city, sans kids for first time in years, undeterred by our daughter's broken wrist and a barrage of other last minute conspiracies against our sneakaway).

Yes it is fun to be travelling with my wife, but to tell you the truth part of my fun her is that I am blogging while she thinks I am checking out reservations for tonight. She finds the whole VCMike thing somewhat amusing…

Why Polaris is Backing Automattic

We just announced leading a small round of funding with Automattic, a San Francisco based startup whose team is most known for its leading role in creating the open source personal publishing (ie, blog) platform WordPress, blog spam blocker Akismet, and blog pinging service Ping-o-Matic. I am also really happy to have the chance to be partnering on this venture with Phil Black from Blacksmith Capital and Doug Mackenzie from Radar Partners.

Although a relatively small investment, we believe this will be a very exciting project to be involved with.

In fact, the truth of the matter is that we fairly quickly came to the decision that we were highly interested in funding and partnering with Automattic — the real decision was Matt's very deliberate and, shall we say, unhurried, choice to take on some VC partners.  I'll leave it to Matt to explain that decision.

Our interest in this opportunity was pretty straightforward.

First and foremost, this is the kind of team VCs like us love to work with. For those of you who don't know Matt Mullenweg, I'll sum it up by saying that he is a truly extraordinary young (just celebrated his release 2.2 a bit back!) innovator and entrepreneur.

I've had the privilege of actually getting to know Matt really well over the last 18 months, and in addition to being someone I now consider a friend, I have to say this guy is amazing. During this time, I've been able to watch WordPress go from its first genuinely commercial grade release (I was at the release party where they had the laptop on the counter ticking off the number of downloads) to over 1 million downloads, a pretty phenomenal thing for an unfunded band of hard core coders with not an iota of time or money dedicated to marketing. I've also seen Matt and his crew pull off things like banging out Akismet, the world's best blog spam blocker, in a shockingly short time. His vision is two steps ahead and he goes from vision to product ten times faster…

It has not taken a lot of imagination to conclude that Matt (along with his small team of the best and brightest contributors to WordPress) is going to be an important innovator in the emerging field of personal publishing, social media, "Web 2.0," or whatever buzzword you prefer for all this stuff.

Lest Matt get all the credit and attention here, I should also point out two other folks who helped us conclude this is a great team to be backing. First, Automattic CEO Toni Schneider is one of those rare entrepreneurs who is really strong technically, has been a successful startup CEO (he ran Oddpost and then made the cover of Business 2.0 when it was acquired by Yahoo!), played a senior role at a large Internet company (he lead much of Yahoo's Web 2.0 efforts), but yet whose real passion is the very early stage startup.

Toni and Matt are a great duo.

We also were eager to get involved in no small part because Tony Conrad, a trusted, good friend of Polaris over the years, has been involved with Matt and Automattic from the very beginning. In many ways, Tony (who was the VC who backed Toni S at Oddpost) is the Oz behind the curtain who quietly helped bring together the group that is now Automattic.

Two other points in addition to the team.

First is the product. On the one hand, any consumer facing technology service that is so easy someone like me can use has really accomplished something. At the same time, an impressive list of people whose jobs and careers require the best love WordPress, so much so that they have switched from other popular blog platforms. Just to name a few, the list includes the likes of Robert Scoble, Rafat Ali (PaidContent.org), Om Malik (GigaOm), About.com, The New York Times, The Wall Street Journal, and, of course, CNET, who is also investing in Automattic. 

In sum, if you believe that blogging, personal publishing, and social media are important market trends which will give birth to important new technologies and businesses, which I and Polaris do, then backing the team that created WordPress and Aksimet seems like a great bet.

Look forward to tracking Automattic's progress and seeing if we are right!

And, I'd love to hear from any wordpress users out there who have stumbled upon this blog.

Citizen Journalism

Had a fascinating conversation a couple days ago with a prominent journalist who has some pretty good thoughts on how make something really valuable (at least from the consumers' perspective) out of the new social media/user generated content movement. 

This is a subject I've been interested in for a while now, both because of an investment we are about to announce in the social media sector, and because it is something we've spent a fair amount of time being pitched on and discussing internally.  Not surprisingly, my partner Alan Spoon, who used to run the Washington Post Company, tends to be a magnet for these types of opportunities.

For any of you who are interested and haven't yet seen it, Steve Outing has pulled together a good thought piece over at Poynter Online. (hat tip to Rafat).

There also is a pretty good recent piece out there called We Media. Check it out here.

National Cable Show

One of the many lessons I have learned in the venture industry is not to invest in ventures whose success is in any meaningful way dependent on monopolists.  Monopolists and startups are a bad mix.  (Yes, I've learned the hard way).

Nonetheless, after having sworn off the event for life, I find myself heading down to Atlanta tomorrow for a couple days at this year's National Cable Show. I do have 3 portfolio CEO's attending, so if nothing else it will be a convenient time to get a bunch of meetings and recruiting interviews done.

But I am still gritting my teeth about it.

In my inbox tonight was an email excerpting an interview with the CEO of a major MSO, who, among other things, proclaimed his company's substantial "focus on innovation."

Now, it is not my style to be particularly harsh or controversial, but…cable operators being innovative? Give me a break!

Microsoft Search beats Google

I spent about an hour this morning with the head of marketing analytics for a major ecommerce company (he preferred to remain unnamed) whose company does alot of business with each of the major search engines. And guess what?

Based on the analysis he has done, Microsoft search beats Google, hands down, both from an end user and an advertising effectiveness perspective.

Just one guy's view, but that is what he gets paid to figure out.

Whodathunkit?

Love to hear comments from readers.

Digital Hollywood

Spent my now customary couple of days out at Digital Hollywood last week.

Nothing personal to the Digital Hollywood organization, but as usual the most productive and interesting time was in the hallways, at the restaurants, etc., catching up with folks who were also there. If you actually want a pretty good overall review of the Conference, check out paidcontent.

Saw a few pretty interesting companies which I plan to followup with. We won't mention any names to protect the innocent.

Highlight was dinner Tuesday night at Valentino, which included a bunch of folks from within my portfolio companies, including Black Arrow, Heavy.com and World Championship Sports Network, the guys from Snap TV, Bigger Boat and Burn Room, David Goldberg, Sean Ryan, Brian Stengel, Dan Donahue and a few of my Polaris colleagues.

Unfortunately I had to cut my trip short when I got the dreaded call from my wife, who was on her way the emergency room with our 10 year old. We had quite a scare but I think everything is back under control now.