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It's Friday and time for summing up the lessons learned this week: <ul> <li><a href="http://www.yahoo.com">Yahoo's</a> (newish) CEO <a href="http://en.wikipedia.org/wiki/Carol_Bartz">Carol Bartz</a> clearly failed as a leader this week when it became public that she apparently sold Yahoo stock <a href="http://www.businessinsider.com/henry-blodget-another-black-eye-for-carol-bartz-2009-9">cashing in close to $2 million</a>. 2 days later <a href="http://www.businessinsider.com/bartz-i-didnt-dump-yahoo-shares-2009-9">she declared</a> that the sale was purely for tax reasons and that she had reacquired the stock but the damage was done as she got killed in the blogosphere and on Twitter for 2 long days of silence. I originally liked her tough talking style and thought that this might be a great way of shaping up Yahoo but the events this week also showed that she doesn't know how to handle sensitive situations. Such an event should have required upfront open communications about the purpose of the stock sale or at least a very quick reaction after it became public and the bashing began. But by waiting a full 2 days to clarify things she failed as a leader and most likely destroyed all goodwill that she had built up in the past months.</li> <li>In the past week lists of <a href="http://twitter.com/bwertz/status/3760289480">10 characteristics of great investors and companies</a> made the round. Part of a great company is always how productive team dynamics are and a <a href="http://twitter.com/bwertz/status/3881391421">really good strategy meeting</a> with <a href="http://www.nexopia.com">Nexopia</a>'s management this week reminded me of some success factors: finding the right balance between praising and challenging other team members; always putting the overall company interest over your personal interest; respecting everybody's contribution to the success of a company; using humor to take pressure of people. There are probably many more but these are some characteristics I like to see in every team. </li> </ul>

It’s Friday and time for summing up the lessons learned this week:

Our portfolio company Suite101.com announced today that it has launched French and Spanish versions of their site after successfully expanding to Germany a year ago. Expanding an Internet company to international markets should be part of every business plan but is often easier said than done. At AbeBooks (which has localized sites for Germany, the UK, France, Italy and Spain), we learned a few lessons the hard way so here is a list of things you should consider when planing to take you company international:

Friday is a good day to reflect and I usually try to come up with the 3 lessons that I learned in the past week - so going forward I will share these on the blog here. So here is what I learned last week: <ul> <li>The value of <a href="http://www.facebook.com">Facebook</a> applications: the <a href="http://www.techcrunch.com/2009/08/17/breaking-myspace-close-to-acquiring-ilike/">sale of iLike to MySpace for a rumored $20 million</a> has shown that the value of such applications is not even close to any stand-alone site of comparable size. <a href="http://www.ilike.com">iLike</a> might be in a vertical that is <a href="http://www.businessinsider.com/music-startups-what-a-crappy-investment-2009-8">hard to monetize</a>, they might even have been in worse shape than everybody thought but fact is that the insecurity about where the Facebook platform will evolve in the future depresses the value of such applications in a significant way. So the lesson learned for investors is to be extremely careful with Facebook applications plays (or any other platform for that matter: iPhone, Blackberry, Twitter, Windows). The lesson learned for entrepreneurs is that a stand-alone application might be too risky and that <a href="https://www.versionone.vc/thoughts-on-the-studio-ization-of-the-application-business/">a studio approach is the only viable approach</a>.</li> <li>Testing resources: testing is such a crucial part for every web company and I have yet to see a single one that has fully optimized its site messages, landing pages, monetization, etc. based on continuous a/b testing. So I was really happy to come across <a href="http://www.whichtestwon.com/">Which Test Won</a>, a site solely dedicated to providing great resources on testing and immediately recommended it to all of our <a href="https://www.versionone.vc/portfolio">portfolio companies</a>.</li> <li>Carpe diem: the <a href="http://twitter.com/bwertz/status/3414298940">shocking news of the death</a> of <a href="http://www.yapta.com">Yapta</a> co-founder and fellow board member <a href="http://www.yapta.com/about/">Brett Allsop</a> at age 38 reminded me how important it is to live life every day. As <a href="http://en.wikipedia.org/wiki/Horace">Horace</a> says: Carpe diem quam minimum credula postero - seize the day and place no trust in tomorrow.</li> </ul>

Friday is a good day to reflect and I usually try to come up with the 3 lessons that I learned in the past week – so going forward I will share these on the blog here. So here is what I learned last week:

On the day that <a href="http://en.wikipedia.org/wiki/Boo.com">Boo.com died in March 2001</a>, not only did the Internet bubble burst but selling fashion and apparel over the Internet seemed dead for forever. So it is exciting to see that fashion and apparel is now one of the most exciting e-commerce categories where tons of innovation is happening. Think the success of private sales (vente privee) sites like the <a href="http://www.gilt.com">Gilt Group</a>, the emergence of online-only brands like the "oh-so-cool-pants-maker" <a href="http://www.bonobos.com">Bonobos</a> or <a href="https://www.versionone.vc/portfolio">our own portfolio</a> company <a href="http://www.indochino.com">Indochino</a> that has developed into the leader for tailor-made suits. All these successes are based on 4 major advantages that the Internet has as a distribution channel for apparel: <ul> <li>Low or no inventory: one of the biggest problems in traditional retailing is the cost of carrying inventory that might not sell in time before the new clothing line arrives. Online apparel retailers not only have a much larger demand base (not needing to decide which clothes to ship to which store) but can also introduce "made-to-order" for higher priced items like suits (and therefore completely eliminate inventory risk)</li> <li>Fast fashion: <a href="http://www.hm.com">H&amp;M</a> and <a href="http://www.zara.com">Zara</a> have been very successful in driving customers repeatedly into stores by coming up with new clothes every 4-8 weeks and "<a href="http://en.wikipedia.org/wiki/Fast_fashion">fast fashion</a>" has been one of the buzzwords in apparel industry since. Online apparel brands can speed up the process from clothes design to making it available to customer even more (e.g. Indochino only needs 3 days to design a suit until it is ready to be ordered online).</li> <li>Customization: customization has been a driver in many categories but had been limited in the apparel category to t-shirts in the past (<a href="http://www.threadless.com">Threadless</a>). Now sites like Indochino offer <a href="http://www.indochino.com/customization/index.html">customization for suits from the size of pockets to the type of buttons</a>.</li> <li>Convenience: there are millions of people out there that hate shopping in a traditional retail environment. Purchasing clothes online can potentially be a much more convenient experience, especially if the customer has stored their preferences or measurements.</li> </ul> I am certain that we will see even more innovation in the apparel space in the upcoming years. Perhaps the next big apparel brand will be an online-only brand, perhaps new intermediaries will make shopping online an even better experience, perhaps every online retailer will offer some sort of customization. The advantages of the Internet as a distribution channel just seem to be too large.

On the day that Boo.com died in March 2001, not only did the Internet bubble burst but selling fashion and apparel over the Internet seemed dead for forever. So it is exciting to see that fashion and apparel is now one of the most exciting e-commerce categories where tons of innovation is happening. Think the success of private sales (vente privee) sites like the Gilt Group, the emergence of online-only brands like the “oh-so-cool-pants-maker” Bonobos or our own portfolio company Indochino that has developed into the leader for tailor-made suits. All these successes are based on 4 major advantages that the Internet has as a distribution channel for apparel:

A few weeks ago I published <a href="https://www.versionone.vc/thoughts-on-the-studio-ization-of-the-application-business/">my thoughts about application studios</a> on this blog and today I am happy to announce the launch of new app studio, Vancouver-based <a href="http://www.socialcrowdventures.com">Social Crowd Ventures</a>. Social Crowd Ventures is a joint project between W Media and <a href="http://twitter.com/pallian">Adarsh Pallian</a>, the very talented developer behind <a href="http://chart.ly/">chart.ly</a> and <a href="http://www.tweetizen.com/">Tweetizen</a>, and plans to launch 4-5 (mostly) Twitter-based applications until the end of the year. The first project that got launched last week is <a href="http://www.justbought.it">Justbought.it</a>, a location-based social tool that allows you share photos and tweets on amazing finds and one-of-a-kind purchases as you stumble upon them (check out coverage here. When deciding about what future apps to develop, Social Crowd Ventures will not only keep the 4 success factors in mind that I outlined in my post last week (focus preferably on one vertical, develop a success formula that can be repeated, leverage inherent strength of the platform you develop for, come up with revenue streams beyond advertising) but will also try to incorporate as much community feed-back into the decisions as possible. Stay tuned for more announcements - go and try out <a href="http://www.justbought.it">Justbought.it</a> and let us know what you think.

A few weeks ago I published my thoughts about application studios on this blog and today I am happy to announce the launch of new app studio, Vancouver-based Social Crowd Ventures. Social Crowd Ventures is a joint project between W Media and Adarsh Pallian, the very talented developer behind chart.ly and Tweetizen, and plans to launch 4-5 (mostly) Twitter-based applications until the end of the year. The first project that got launched last week is Justbought.it, a location-based social tool that allows you share photos and tweets on amazing finds and one-of-a-kind purchases as you stumble upon them (check out coverage here. When deciding about what future apps to develop, Social Crowd Ventures will not only keep the 4 success factors in mind that I outlined in my post last week (focus preferably on one vertical, develop a success formula that can be repeated, leverage inherent strength of the platform you develop for, come up with revenue streams beyond advertising) but will also try to incorporate as much community feed-back into the decisions as possible. Stay tuned for more announcements – go and try out Justbought.it and let us know what you think.

2 years after its launch the <a href="http://www.facebook.com/developers/">Facebook platform</a> can almost be considered mature and the new belle in application town is <a href="http://www.twitter.com">Twitter</a> (with <a href="http://twitter.com/fredwilson/status/2476285860">apparently already over 11K applications</a>). Due to the very low barriers to entry both platforms have become very crowded in a short period of time so it is time to ask the question what type of application developers can be successful on these platforms going forward. Nobody certainly beats out the single developer that can build and launch an application at very low costs but we have seen a few really successful studio approaches to the application business in the past year. When you look at the list of the most successful of those, <a href="http://www.rockyou.com">RockYou</a> and <a href="http://www.slide.com">Slide</a> were leading the pack in the beginning with <a href="http://www.zynga.com">Zynga</a> and <a href="http://www.playfish.com">Playfish</a> dominating the rankings as of late. As the Facebook platform matured the business model of these application developers matured as well and I would propose 4 success factors for a studio approach: <ul> <li>Focus on one vertical that you understand really well: Zynga and Playfish only do games and they are extremely good at it. Studios like RockYou or Slide with their very diverse application will most likely struggle in the long time.</li> <li>Find a success formula and stick to it: <a href="http://www.digitalchocolate.com/">Digital Chocolate</a> describes their secret sauce for iPhone games by Originality x Quality x Ubiquity / File Size x Dev. Cost</li> <li>Leverage the inherent strength of the platform that you are developing for: it is social for Facebook and real-time communications for Twitter.</li> <li>Have a revenue stream besides advertising (i.e. virtual goods): even app developers that run large scale networks like Slide <a href="http://technews.am/conversations/silicon-alley-insider/slide_is_now_a_500_million_sponsored_app_maker">struggle to make enough money by selling ads</a>.</li> </ul> Let me know your thoughts on this topic - and stay tuned for more announcements in the app studio space next week.

2 years after its launch the Facebook platform can almost be considered mature and the new belle in application town is Twitter (with apparently already over 11K applications). Due to the very low barriers to entry both platforms have become very crowded in a short period of time so it is time to ask the question what type of application developers can be successful on these platforms going forward. Nobody certainly beats out the single developer that can build and launch an application at very low costs but we have seen a few really successful studio approaches to the application business in the past year. When you look at the list of the most successful of those, RockYou and Slide were leading the pack in the beginning with Zynga and Playfish dominating the rankings as of late. As the Facebook platform matured the business model of these application developers matured as well and I would propose 4 success factors for a studio approach:

As <a href="http://www.techvibes.com/blog/yapta-raises-2-million-and-save-you-money-on-flights">already announced last week</a>, Seattle-based <a href="http://www.yapta.com">Yapta</a> just closed a $2 million Series B led by <a href="http://www.voyagercapital.com/">Voyager Capital</a> and I am very happy to announce that W Media participated in this round. Yapta is a online travel shopping service that monitors airfare and hotel prices for travelers. Led by <a href="http://www.yapta.com/about/">CEO Tom Romary</a>, the company has not only built up some significant traction over the past year but was also very successful in attracting top talent and top investors (the major investor besides Voyager Capital being <a href="http://www.firstround.com/">First Round Capital</a>). I have spent a considerable amount of time in Seattle since the beginning of the year and am really impressed by the consumer Internet scene there so I am hopeful that we will see more Seattle investments by W Media in the next little while. Looking forward to be part of the Yapta story going forward, with now 3 investments in the travel space (<a href="http://www.escapio.com">Escapio.com</a> and <a href="http://www.tripsbytips.com">Tripsbytips.com</a> being the other two) this vertical is becoming increasingly important for the company.

As already announced last week, Seattle-based Yapta just closed a $2 million Series B led by Voyager Capital and I am very happy to announce that W Media participated in this round. Yapta is a online travel shopping service that monitors airfare and hotel prices for travelers.

<a href="http://box693.bluehost.com/~version3/wp">W Media Ventures</a> has so far shied away from investments in the mobile space, partly because of a lack of exciting opportunities but most importantly because the sector has lacked a few attributes that the Internet provides: multiple monetization opportunities (business models in the mobile space were until recently mostly controlled by carriers) and an open platform to develop on (talk to any mobile start-up and you will hear about the inefficiencies to develop applications for hundreds of different handset models). Thanks to <a href="http://www.rim.com/">RIM</a>, <a href="http://www.apple.com">Apple</a> and <a href="http://www.google.com">Google</a> this has recently started to change and interesting mobile platforms with attractive monetization options have emerged. So when I got invited by <a href="http://nothingtosay.firstround.com/">Chris Fralic</a> over at <a href="http://firstround.com/">First Round Capital</a> to invest a small amount in <a href="http://www.pinchmedia.com/">PinchMedia</a> alongside them and <a href="http://www.unionsquareventures.com/">Union Square Ventures</a> (which are two of the smartest consumer internet VC's in my opinion), I was very intrigued. PinchMedia provides analytics for mobile applications so think <a href="http://www.omniture.com">Omniture</a> or <a href="http://www.coremetrics.com/">Coremetrics</a> for the mobile space (currently, analytics are only available for the iPhone platform but will cover the other mobile platforms (Blackberry, Android) very soon). Looking at the incredible growth the iPhone apps store has seen in the first few months since its launch there are tremendous opportunities ahead for <a href="http://yardley.ca/about/">Greg Yardley</a> (a fellow Canadian living in NYC) and his team - they have already built up an impressive product and now also the capital and resources to scale the business.

W Media Ventures has so far shied away from investments in the mobile space, partly because of a lack of exciting opportunities but most importantly because the sector has lacked a few attributes that the Internet provides: multiple monetization opportunities (business models in the mobile space were until recently mostly controlled by carriers) and an open platform to develop on (talk to any mobile start-up and you will hear about the inefficiencies to develop applications for hundreds of different handset models).

Today, <a href="http://michaelyurechko.com/">Michael Yurechko</a> started working for <a href="http://www.carrieanddanielle.com">Carrie &amp; Danielle</a>. How Michael got to the company? He commented on <a href="http://www.avc.com">Fred Wilson's blog</a> on a post that was <a href="http://www.avc.com/a_vc/2009/02/one-thing-you-dont-need-to-be-an-entrepreneur-a-college-degree.html">discussing if you need a college degree to be an entrepreneur</a>, Fred connected him to me as Michael is from Vancouver, I met with Michael, liked him and offered him a job. This is what social media is all about: connecting people and ideas beyond geographies and existing relationships, don't you love the Internet? And don't forget to comment on a blog the next time you can be part of an interesting conversation.

Today, Michael Yurechko started working for Carrie & Danielle. How Michael got to the company? He commented on Fred Wilson’s blog on a post that was discussing if you need a college degree to be an entrepreneur, Fred connected him to me as Michael is from Vancouver, I met with Michael, liked him and offered him a job. This is what social media is all about: connecting people and ideas beyond geographies and existing relationships, don’t you love the Internet? And don’t forget to comment on a blog the next time you can be part of an interesting conversation.

I attended the yearly <a href="http://www.thinkequity.com/">ThinkEquity</a> conference in <a href="http://www.tripsbytips.de/reisefuehrer-lesen/reisefuehrer-half-moon-bay/8071644.html">Half Moon Bay</a> at the beginning of this week and have to congratulate the organizers for putting on one of the best events where private technology companies can present to investors. This year's conference focused on 3 major areas: social gaming, display advertising and education (2 of the 3 areas coincidentally overlap with <a href="https://www.versionone.vc/thoughts-on-current-opportunities-in-consumer-internet/">where I currently see opportunities</a>). Some quick take-aways: <ul> <li>It is not really a secret anymore but social gaming is on fire. <a href="http://www.zynga.com">Zynga</a> has apparently a revenue run rate of close to $100 million and is only a 2 year old company. <a href="http://www.playfish.com">Playfish</a>'s PetSociety has more than 10 million active users on Facebook and is just 8 months old. In all of these cases, two things come together: superior, viral distribution by building games on top of the social graph and excellent monetization potential through virtual goods. Social media has shown impressive growth in many areas over the past year but social gaming is probably the only category that has turned their audience into real dollars.</li> <li>There continue to be large opportunities in display advertising: brand advertising is a significantly larger market than performance advertising but nobody has figured out how to scale it on the web. More standardization and more data will help the course but we are far away from finding a Google AdSense-like product for display.</li> <li>Education is always being cited as the big opportunity of the future but the reality still looks different with even established educational companies struggling to find the right online model. It is worthwhile reading the <a href="https://www.versionone.vc/thoughts-on-current-opportunities-in-consumer-internet/">Hacking Education</a> post on the <a href="http://www.usv.com">Union Square Ventures</a> blog.</li> </ul> All in all it still feels like very exciting times in consumer Internet...

I attended the yearly ThinkEquity conference in Half Moon Bay at the beginning of this week and have to congratulate the organizers for putting on one of the best events where private technology companies can present to investors. This year’s conference focused on 3 major areas: social gaming, display advertising and education (2 of the 3 areas coincidentally overlap with where I currently see opportunities). Some quick take-aways:

After I got asked twice yesterday about where I currently saw opportunities in the consumer Internet space so it felt like good timing to sum up my thoughts on this topic in a quick blog post. Here are the 3 areas that I find the most interesting for the moment: <ul> <li>Better targeting and increased accountability for display advertising: <a href="http://www.google.com">Google</a> has set the industry standard for performance advertising but nobody has yet figured out how to drive accountability into display advertising. There are several companies working on solutions but none has captured significant market share so far.</li> <li>Marketplaces built on <a href="http://www.twitter.com">Twitter</a>: Twitter is rapidly emerging into real-time search and there are opportunities to build (information, service or commerce) marketplaces on top of this eco-system. Examples are <a href="http://www.splits.org/">Splits.org</a> (matching of recruiters) or <a href="http://stocktwits.com/">Stocktwits</a> for discussions around stocks). </li> <li>Education: the education vertical is a natural for a high online penetration and while progress is being hampered by slow-moving institutions sitting in the middle, more and more educational ideas are getting traction. Examples are Seattle-based <a href="http://www.teachstreet.com/">Teachstreet</a> (an online community for education) or recently funded <a href="http://www.myngle.com/">Myngle</a> (a platform for online language education).</li> </ul> All three opportunities feel equally big and important to me so it will be interesting to see what ideas will emerge in these areas over the next little while.