Category Archives: Start-up and Fund Raising

Lists the posts relevant to start-ups and raising investment capital.

The gift economy: Why I became a TWiST Producer

ThisWeekInStartupsWhen I decided to remove the shackles of the corporate cube and begin a career hustling software, my life changed forever. I worked for some great VC-backed companies for the next 13 years and became a denizen of the “friendly skies”, hotels and fast food. In October of 2002 I made a big decision, a decision that was made based upon the needs of my family more than my career aspirations.  I decided to buy a software company with a legacy product in south Florida where I was raised and focus on two things: 1). building a company in a niche industry and 2). spending more time with my family.

For many reasons, not the least of which is the special attention my son needs (A Life of Distraction), the decision to hang up my frequent flier wings was a good one. The impact on my career wasn’t apparent to me at the time, but as I look back at that inflection point I know in my heart it was the right decision. However it didn’t take long for me to become disconnected from the “techniverse”. My connections and knowledge of the industry began to atrophy.

My first blog post was in 2008, but it really wasn’t until Jan of 2010 that I decided to re-engage. I immersed myself in tech blogs and podcasts.  In March of that year I stumbled across Jason Calacanis and This Week in Start-ups (TWiST). My first listen was episode #46 whereby Jason interviewed David Heinemeier-Hansson, the creator of Ruby on Rails and partner at 37Signals. Jason and David have very different approaches to funding and building start-ups, but the debate was brilliant as their passion and philosphies about business rang through with such clarity.

TWiST has had a profound effect on how I think about business. It helped drive me to co-found a company called DzineBox to build an online communication platform to help home and business owners connect with architects and designers. This lead to the incubation of a couple other socially-driven platforms that have viral characteristics. As for my “day job”, the ideas expressed on TWiST have helped me come up with many market driven changes that are transforming a business founded on a legacy based accounting system into a web and mobile consumer focused application for various recreation industries.

In a nut shell, TWiST has helped to re-energize my entrepreneurial spirit and broaden my thinking. Every episode is a jolt of intellectual energy.

In May of this year I became a TWiST Producer. I wanted to get closer to the action and contribute to the show in some way. Helping to produce the show and interacting with fellow Producers is a huge benefit. When I tell people that I pay a monthly fee to be a part of the so called TWiST List, I get some blank stares. “You mean you pay to work for the show?” or “you give them money and valuable feedback?”. These people completely miss the point about the value I receive in kind by being associated with such a dynamic production like TWiST and the talented people involved in this process. The “backchannel” as we call it of e-mails, discussion board threads and Producer conference calls are of great value to anyone who engages in the process. But at the end of the day it’s all about contribution. Like anything, postive outcomes require participation and engagement.

What’s the CD maker to do?

Nostalgia: We humans seem to be drawn to it. Most of us have a soft spot in our heart for the good old days. Remember when vinyl was in and you would sit around as a kid listening to your favorite bands, staring at the album cover, the inner liner, the record sleeve and so on?

CDs replaced vinyl records and the distribution of music on CDs reigned supreme in the 80s, 90s and first half of the 00s. Millions and millions of CDs were purchased each year by people of all ages in the $15 to $18 price range. The record (CD) labels actually took something away from us. Those of us in our 40s or older will remember the little 45 records we had when we were kids. The radio hit was on Side A and another less popular song was on Side B. In those days you were able to buy just two songs. The CD industry came along with a more profitable business model for themselves. Someone in a board room somewhere said, “we can’t make any money on two song CDs.” So choice was subverted for profits. The record industry bundled 10-15 songs on one disk and unabashedly charged us $15 to $18 per CD. You may have only wanted one or two songs but you were forced to buy 10 or 12. Great for the music companies, crappy for the consumers.

Along came this digital music format called MP3. The music industry brushed it off as “geekdom” fodder because MP3s had no distribution. That is until Napster came along. One guy, with an interest in sharing his music collection and allowing others to share their music on his server changed the music industry forever. The model evolved into peer-to-peer networks in an attempt to alleviate the issue of illegally distributing copyrighted content.

The music industry, instead of embracing the Internet and the revolutionary way it was completely changing business upon business decided to litigate instead of innovate. They chose to sue companies developing music distribution software like Napster and Limewire, as well users of digital music too. The press had a field day with this, describing music execs raiding college dorms to apprehend the music pirates who were illegally sharing content.

This was the beginning of the end for the highly profitable CD. Apple, along with Amazon, Rhapsody, Yahoo! and others struck deals with the content providers to legally distribute songs for $0.99 each. They unbundled the CD and allowed fans to download just the songs they wanted. For the first time the artists (especially new ones) had a choice. It was no longer paramount to get a band “signed” with a label. Musicians who embraced this technology gave their fans “choice”. Forward thinkers like Radiohead and Linkin Park let fans decide what to pay for their music. New fans just experimenting with these bands can download samples for free. Serious fans have more selection than what stores made available as bands packaged music downloads with concert tickets, videos, books, clothing, etc.

Most people know this story. There are a similar stories unfolding in many other industries, not the least of which is the newspaper industry. The Internet allows anyone to create content and distribute it in ways that were never possible before. This blog post is a good example of that.

So what’s happening in your industry and your business? Are you a content creator? Are you a distributor? Do you sell goods and services? What can we learn from the demise of the CD, your local bookstore and newsstands across the country?