California Dreamin'

A brief walkthrough

Twenty people from different Bonnier companies around the world went to San Francisco for the fourth part of the Bonnier Publishing Program. This is a brief report about what we saw and learned.

The trip started with Richard Allen Horning, a 64-year-old lawyer at the law firm Fish & Richardson Venture Technology Group, and ended with Trip Adler, a 24-year-old entrepreneur who in a few months created enough traffic to make his site the 65^th biggest on the web (www.scribd.com).

The difference between them may sound huge, but the similarities were more obvious. They were both embracing the culture of the SF Bay Area, the entrepreneurial mentality, and emphasized that success can be achieved through mistakes and learning from them.

The Venture Capital

First day started off with an introduction to the venture capital-culture in the Silicon Valley by Richard Allen Horning (www.fr.com). The story starts around the gold rush, goes through industrialization and the construction of the railroads, and leads up to today's tech-driven Valley industry.

He also pointed out the key factors that venture capitalists are looking for in a startup:

Team—who is doing it?

Opportunity—how big can this become?

Scalability—which markets can we go to?

Protectibility—how can I protect this idea - the uniqueness of the idea.

Exit plan—when do we get our money back?

At the end, Horning mentioned the most important address in San Francisco: 235 Main Street—the bankruptcy office—"Because when everything goes down the drain, all their belongings are redeployed and they give space to another great startup".

Eric Eldon, one of the editors at Venture Beat (twitter: twitter.com/venturebeat)—a blog about "private companies and the venture capital that fuels them"—talked about trends and the venture capital in the aftermath of the financial crisis. Eldon pointed out that the venture capitalists are more conservative in their decisions right now, but that can also be a good thing in forcing the entrepreneurs to really think their ideas through.

He also mentioned a few things about the key successes behind Facebook—mainly that they are aware of the importance of constant development even if it stirs up emotions among the users: "Facebook are brave enough to make million of users mad."

Long tail at Google

At Google, we got some in-depth insights on AdWords, AdSense and also the digitization process at Google Books, but we also got an overview of what a working place might look like, even post-IT-bubble: pools, free lunch courts, gaming rooms and the occasional "bring your kids to work day".

Fred Vallaeys, "Adwords Evangelist" at Google, talked about the importance of the long tail for advertising—the deeper down you get into the content, the easier it is to match the correct ads with the right target group—thus getting a significantly higher click rate.

The long tail and monetizing on archived material are also the main drivers behind the big digitization-project at Google Books. Nick Corman at Google showed how they use backlogs from magazines such as Popular Science and New York Magazine, digitizing them and making them searchable online, thus making it possible to create new revenue streams on material that was previously only archived in damp basements. 

Futurism and design processes at Stanford

From Google campus, we headed out to another campus at Stanford University where we met up with Holly Brook for a tour on the campus with 20 libraries and a church.  Paul Saffo, a technical forecaster and futurist (and former member of the Board of Directors at Framfab), held a brief but great speech on how the world are transcending into a new economical phase. He saw the financial crisis as the end of the consumer economy and the start of the creator economy—where participation and contribution are a big part of the economy.

He also forecasted that just as we've seen the struggle of the music industry as people buy single songs on mp3 rather than albums, that the same thing will happen with the TV and magazine industry. People will want to buy single TV shows and single articles—therefore reducing the importance of packaging.

And the trick of technical forecasting? According to Paul Saffo—"Just look back twice as far as you look forward." And "The eye of a hurricane is a bad place to be at when determining which direction the wind is blowing."

Final station at the Stanford University was a design workshop lead by Corey Ford at the d.School. The process they are teaching is publicly known through the famous design company Ideo (the company's founder also teaches at Stanford). A few of the central parts of the process are: always base the idea on empathy (field studies, interviews, testing), that the creator is a team rather than a sole creator and the importance of quickly getting the idea to the prototype phase.

"When to focus and when to flare" was stressed as we tried the steps of the design process and ended up with a lot of... creative prototypes.   

To twitter or not to twitter

All of us in the group, debating on whether Twitter could be used for anything useful or not, got the laydown from start-up entrepreneur Guy Kawasaki (twitter.com/guykawasaki), writer of the book Reality Check and founder of the RSS-compilation site Alltop.com. Kawasaki considered Twitter a marketing tool, driving traffic to his Web site. He hires two ghost writers to twitter for him, and used the somewhat questionable service Twitter Hawk to scan the web for certain keywords and then create automated responses—of course including a link to a suitable Alltop-topic.

Spam anyone? Maybe, but as Kawasaki himself stated:

"I have 115,000 followers. If I piss off ten of them a day, it's going to take some time to piss them all off."

He was also eventually evicted from Twitter, but knowing the CEO of the company he managed to get back in there...so if there's a lesson to be learned here; it's all about networking. And clever marketing ideas of course.  

The trip also included Nova Spivack, founder and CEO of Twine (www.twine.com), a visit at Digg.com and the CEO Bob Buch, an interesting afternoon at Lucas Films, Lucas Arts and their special effects company Light and Magic and finishing off with a workshop together with the people at Bonnier-owned book company Weldon Owen (www.weldonowen.com).

Summary

Some key learnings from the trip includes that a lot of the visited companies are obviously focusing on targeted and behavioural advertising, breaking the content into small pieces to get a higher CPM and a better click-through-rate.

Social media is clearly exploding and the potential on how media companies can benefit from these and their own efforts in the field, is still far from fully explored, but there are a lot of interesting projects and companies addressing the issue.

The dire need of data mining, the need for smarter and better search logics is another field in which a lot of companies are putting a lot of effort. Both Digg.com, Twine.com and Google are constantly working with this.

And of course, the entrepreneurial spirit of the entire area was one of the biggest inspirations to take back home. The willingness to try and the courage to fail—in order to learn, move on and create something fantastic.

The final quote will be from the 24-year-old Trip Adler, CEO of the immensely successful site Scribd (http://twitter.com/scribd) (sometimes labeled "YouTube for the written word"):

"You have to have many miracles in a row to succeed".

Failure is not always the best way to succeed—miracles are pretty good too.