the always controversial sarah lacy Archive
One thing I've noticed during my six months of jet-setting is that entrepreneurs around the world want to be compared to Silicon Valley, but frequently get upset when you do it. Michael Arrington jokingly asks how I intend to piss off a whole country this time before I leave for any trip. (At least, I think he's joking...)
So, note the tap dancing below as Ayelet Noff asks me to compare Silicon Valley entrepreneurs to London entrepreneurs and Israeli entrepreneurs.
People keep telling me to "travel safe." For the record this is the only time I've been TERRIFIED FOR MY LIFE during my whirlwind of travel for my new book on global entrepreneurs. I'm going to let this video speak for itself. Mostly.
First, know a few things:
1. This was not staged, and clearly Geoff can read the future.
2. See how fast he left? The pictures don't show it, but that's how fast he came in. I happened to be reviewing the first part of this video on the FlipCam, and I heard Geoff yell, "HE'S BACK!" and looked up to a big snout a few meters away and closing on me. I froze, looking around for the staff to do something. But he had waited for the ENTIRE wait staff to go downstairs. Wiley.
3. In ten years of being together, Geoff says he has NEVER heard me scream as loud as I did this morning. I really thought I was about to get rabies or lose an arm.
4. Afterwards, my driver came up and said, "Come and look at who's on the roof eating a croissant!" Yeah, that'd be mine.
5. Our cat, Mr. Vinnie, is on a diet. Our other cat, Boo, is not. So whenever he gets a chance Vinnie charges in the room where we keep her food and eats as much of it, as fast as he can, terrifying Boo in the process. I used to tell her to toughen up. Now I know how she feels. Sorry, Boo.
6. He sat on the roof and ate all of the pastries he stole, then came down and his kids ran up. He didn't even save them any! They were like "Hey Dad, where's the food?" He's not even a good dad!
7. Regardless of this video, I *highly* recommend the Akagera Game Lodge in Rwanda. The staff was amazing, and the scenery was beautiful.
It's about a week in, and I've been having quite a time in China. I found Shanghai incredibly frustrating and difficult to navigate, but I've really fallen for Beijing-- which is funny because every single person told me I'd feel the opposite way. "When are you going to stop listening to everyone? No one knows anything!" the curmudgeonly Mr. Lacy said over Skype when I told him of this stunning revelation. It's good advice except for the fact that as a reporter I'd pretty much be out of a job if I stopped listening to people. (Insert bad reporter joke here.)
Last night, we had an amazing dinner party starring Peking Duck and Mr. Kaiser Kuo, a Bejing rock star (literally), former editor for Red Herring Magazine and all around Beijing gadfly. Meeting him when you come to visit appears to be a rite of passage. And speaking of rites of passage, after dinner we went to Chocolate, a weird Russian nightclub in the Russian district of Beijing. Yes, there is such a thing. When I walked in I heard some warbling to Hotel California and excitedly said, "Oh are we karaoke-ing!?" Nope. That was just the house band. And they decided to keep coming back to that classic Eagles standard throughout the set.
Also, in this video is my fabulous traveling companion Mr. Tom Limongello. Tom and I met online (Remember when that used to sound sketchy? Ok, maybe it still does.) and he somewhat insanely volunteered to be a research assistant and China guide for free. I somewhat insanely agreed having never met him, hoping he wasn't an axe murderer. Please go follow him on Twitter NOW so he gets something out of this transaction. ;) In case anyone is wondering, I'm taking all applications for un-paid India travel companions. And no, I can't afford to pay for your travel. Also, I can't promise sketchy Russian clubs, I don't even know if India has a Russian district. But I can promise having to answer, "What time is our first meeting tomorrow?" over-and-over again and that you'll meet lots of cool companies. Don't all apply at once!
NOTE: If you feel bad for the tiny girl watching the racy pseudo-strip show, don't worry. There was a kids section to the bar.
As loyal readers know I’ve been spending quite a bit of the last few months quietly working on some pretty radical and exciting career changes. I’ve already blogged about my role shifting at Yahoo's TechTicker, and the fact that I’m cutting out almost all conferences this year. I'm finally able to talk about the last two pieces of news today, and you’ll see why it was crucial for me to make a little more time in my schedule.
The first one is something I’ve been working towards since December 2007: I’ve finally closed my next book deal. Before I tell you about it, let me step back and say that the experience of writing “Once You’re Lucky, Twice You’re Good” was probably the most exhilarating and challenging thing I’ve ever done in my life. I knew I wanted to do another book, but I was worried that anything would pale in comparison.
Business reporters are rarely in the middle of something that’s also a mass cultural movement, the way Web 2.0 was. And it’s even rarer to be the reporter in the middle of that trend early-on, with near-unfettered access. The book was also the culmination of ten years of covering startups and the Web, with so many of the themes of the book coming out of articles I’d written week-after-week and conversations at endless breakfasts, lunches and dinners with investors, coders and nearly everyone who makes up the Valley ecosystem. I worked hard, but I was also in the right place at the right time, and I didn’t think it was possible that I’d find another book that I could be that passionate about again.
Then, a month after finally turning it into my publishers in 2007, I was sitting on a beach in Mexico and my next idea hit me. (My husband may never take me on vacation again.)
The new book is about global entrepreneurship. What I don’t mean by that is globalization or social entrepreneurship. It’s the story of real, ambitious, risk-taking entrepreneurs in emerging markets around the world who are taking advantage of the turmoil all around them to build huge businesses, the Western venture capital money that’s trying to invest in them, and the cultural chasm the two are, so far, having a hard time crossing. To tell this story right, I’m going to spend between 30-40 weeks on the ground in Israel, China, India, Africa and Mexico/South America over the next year and a half. If you follow me on Twitter, you know I've actually already started. It works out to roughly 2-3 weeks at a time overseas, followed by 2-3 weeks here, and a few months with no travel here and there for sanity. My publisher is John Wiley & Sons and, yes, I was border-line insane to try to sell a book in this market. Huge thanks to them for believing in the project so much, and my agent, Daniel Greenberg, for pulling off the impossible once again.
I’ll still keep a foot firmly planted in Silicon Valley—after all, it’s an integral part of this story, too. And I’ll still write my Valley Girl column for BusinessWeek and do three-to-four interviews per month plus my daily Valley Buzz post for TechTicker. I’ll also still appear on NBC’s Press:Here during the weeks that I’m in town.
So, to sum up, we've got a column, I'm hosting one show, commuting an hour to be a regular guest on another and traveling around the world to write a book…is that enough to keep me busy? Hardly. That’s why I’m also announcing that I’ll have an ongoing gig with TechCrunch. Actually, Michael Arrington already did. Given my other responsibilities, I won't be there everyday, but I’ll be writing two-to-five posts per week, likely a lot on the weekends, a lot on airplanes and a lot from the road. You're better off sending announcements about your latest product launch wherever it is you send them now, because I’ll be focusing on analysis of the business of Silicon Valley, emerging markets and the collision between them.
While I've been working on pulling the book together for more than a year, no one is more surprised than I am at the TechCrunch announcement. You should have seen the Cheshire cat "I won" grin on Michael Arrington's face when we finished negotiating it all. He and I have had an ongoing Abbot-and-Costello routine about how I'd never write there because I was too busy and liked writing on this site too much.
But when I filled in for him in February, my thoughts changed. Trolls aside, I was blown away by the level of engagement and love for that blog among entrepreneurs around the world. It's not just a blog about Silicon Valley and Web 2.0. Subscribing to newspapers or business magazines doesn't really mean you read them. (Ask the tall plastic-wrapped stack in my hallway.) But TechCrunch readers read every single thing on that site, chew it up, digest it, spit it out and talk to their friends about it. It seemed the perfect place to write about what I was seeing on the road as the book unfolds, because I'm well aware I can't write this book alone. It needs a community. After all, a world of entrepreneurs is a pretty big topic.
I'm not killing SarahLacy.com. I'll be cross-posting my TechCrunch stuff here, linking to BusinessWeek and Yahoo stuff, and writing more personal posts about my experiences on the road as I travel. And yes, we'll have FlipCam footage.
I said in an interview late last year that my next book would be "stupidly ambitious" and I think I've delivered on that promise. I hope you enjoy the journey as much as I know I will.
Just wanted to say a quick blog hai. Things have been nuts for me lately, and now that I'm officially off Michael Arrington-duty, I am trying to dig out of a swamp of logistical things I've been putting off for weeks. Like, getting emails working on my BlackBerry and getting AT&T out here to fix my phone line so I can do radio interviews and have my TiVo back. I'm very proud I finally found time to call the bank and let them know it was indeed me in Africa logging onto my account, not some fraudster, so I can finally pay my bills online again. My various bill collectors are probably glad too. (Yes, I do need a new assistant. I know.)
Long time readers might remember that I'm neurotic and goal-obsessed enough that I not only make a very well thought-out list of New Years Resolutions, but every month I grade myself on how well I do. In January I scored a lousy 61 out of 100. In February I upped that to a 72, partially because i scored higher on the "Be Nicer to Mr. Lacy" category. I'm up to a C-student!
Speaking of goals, I should have some cool news soon. In the meantime, here's the coverage I did for TechCrunch in February, a link to the last two Press:Here shows I was on, my latest ValleyGirl column on unsexy but profitable eNewsletters, and, below, a few segments on gadgets I did with BusinessWeek review honcho Steve Wildstrom for TechTicker last week.
I am still lusting after the Palm Pre more than any other gadget, but the Kindle 2 is a close second. With all the international travel I'm doing these days Bose Noise Reduction Headsets are a close third. And Mr. Lacy and I have been close to caving on a huge new flat panel for more than a year, but we're taking Mr. Wildstrom's advice in clip #2 below instead. Not that we can afford any of these indulgences. Oh to be back in pre-recession days!
I've been quite the juggler so far this week, so I thought I'd link to some of the stuff I've been up to.
Here's my latest BusinessWeek column. It talks about the erosion of local advertising amid newspapers and why we don't care enough that they're going away to, oh, say, subscribe. Further, I throw doubt on this whole idea that these local ads will flood online creating the next great market. Needless to say, it's created some controversy and push back. A dozen or so companies have written me to tell me they're indeed selling ads to local companies. I don't doubt it. My point is it's near impossible to build one huge-billion dollar business selling ads in local markets throughout the country. It's a bit like the push back I got on my software as a service column. Yeah, customers love it and you can get to $10 million-$50 million in revenues pretty easily. If that's the new end goal for venture backed startups the Valley is in trouble.
Meanwhile, I've also been busy deriding Sirius and actually defending Google over at TechCrunch. And below is the first installment of a four part series of interviews with the controversial Jimmy Wales, founder of Wikipedia. It's a longer clip than we usually run, but I found the stuff at the end about why Wikipedia doesn't put ads on its site particularly interesting. Enjoy!
Why? That's not important. What's important is that I'm fully-- FULLY-- vaccinated. I've also got anti-malarials and cipro. I won't be blogging or Twittering much while I'm gone, so enjoy this little farewell video shot from the floor of the San Francisco Department of Health. When I get back, it's TechCrunch time!
BTW: this is what my arms felt like the next day. Wait for it...
Duncan Riley over at The Inquisitr has a poll asking how long I can last at TechCrunch. It's actually an incredibly complimentary post. I mean, I want this on my tombstone:
But Duncan details how tough of a battleground that blog has been for women. He aptly sums up every reason Mr. Lacy didn't want me to help Arrington out. I, for one, can't imagine any comments worse than the ones I got at SXSW or get daily on TechTicker. I think Duncan underestimates how much people already hate me!
But he is right that I don't mince words or opinions. So, readers, you know me pretty well. What do you think? Can I last two weeks? Head on over and vote!
Earlier this month I made my feelings about OpenTable abundantly clear, and as I said then, the reason the company is most likely anxious to get all those unused dining checks off its books is because it's gussying up its financials to go public. Of course, I thought the company would wait until the market recovered. Nope, they filed today, which means OpenTable is either very optimistic about a turnaround in 2009 or really needs some cash.
Since flaming the company, I've had a few conversations with people who really do love it, find it useful and have not had my issues. (Although most everyone I've talked to agrees the dining rewards program is lame, at best.) Still, should OpenTable price, I don't think this is a stock you want to own for the following five reasons:
1. Did I mention it's 2009? Have you seen the markets?
2. OpenTable is essentially a local business. They have to conquer territory market-by-market, restaurant-by-restaurant. Local is one of the hardest and most expensive things to do well. It's also one of the only things that the Internet doesn't particularly make easier. Just look at Craigslist: The gods of local. The site's traffic is still dominated by a few big cities. Local hits tipping points and network effects but only in each city. There is traditionally no national tipping point for locally-oriented businesses. In other words, a restaurant in Memphis isn't going to do something because a restaurant in New York finds it valuable.
3. Margins. Imagine that! OpenTable isn't very profitable selling software-as-a-service. That's because it's a very expensive business model to scale, as I've detailed at length here. In short: The software doesn't sell itself, subscription revenues are monthly and steady, but lower in dollar amount and customers can cancel at any time. Such is the pay-as-you-go business model. You can build a huge business here as Salesforce.com has proven. Unfortunately, it's really the only one who has proven that. Even Netsuite, who I'm very bullish on, has struggled with profitability.
4. Restaurants are going to be closing and cutting corners as the recession wears on-- that can't be good for revenue growth. When fewer people are coming in your doors, do you need to pay for a reservation service?
5. The online travel agency effect. I could be way off here, but a lot of San Francisco restaurants just take reservations on their own sites, eschewing OpenTable. They don't want to pay the fees, and why should they when building and maintaining a Web site isn't exactly hard in this day and age? OpenTable may have brought restaurants into the online age, the way sites like Expedia and Travelocity did for the airlines, but increasingly vendors hate middlemen. Especially middlemen who control the customer relationship and take a cut of the proceeds. A lot of restaurants will still want to outsource, of course, but I think it's a risk when it comes to growth.
To OpenTable's credit, they reached out to me after that nasty early January post, and I was supposed to have a sit down with CEO Jeff Jordan. That's not happening now thanks to the quiet period! But I look forward to talking to him when he can talk again. OpenTable has always been ostrich-like when it comes to media so maybe there's something I'm missing here. I'm always open to someone changing my mind, as Tony Hsieh knows!
I really don't know what to say about Michael Arrington and the whole spitting thing. Let's start with the fact that the clip of me throwing water on him is no longer as funny to me as it was yesterday, even though it was clearly staged and you can hear me laughing as I walk off.
I thought about penning a quick column for BusinessWeek about the topic, but it was just too close to home. After all, I've got some experience here. I haven't ever been spat on (yet), but I have had a few very disturbing physical things happen to me over the last few years, and more than a few threats. And at least once a day someone, somewhere online says something brutally mean about me. Notice I didn't say "something about my work"-- something about me personally. And 99.99% of the time, they've never met me.
But more to the point, Michael is a good friend of mine and I know him. I know him well enough to know the characterization of this ValleyWag post is utter bullshit. Michael didn't seek out being famous. That doesn't even make sense. He started TechCrunch at a time when startups were utterly unsexy, and no one thought you could build a huge media business off a blog. Michael eschews the limelight more than he seeks it. He spends most of his time at home, working hard, not out talking about it. He does a fraction of the press and appearances he could do. (Trust me, he's bailed on me more than a few times!) And even at Valley parties, he's usually off to the side or sitting in the back somewhere talking to entrepreneurs. And he's turned down many funding and acquisition opportunities for TechCrunch. He's stashed away at least a year's worth of revenues, so this is hardly some Web 2.0 pony he was trying to run until it died, and now having failed, he's looking for an out. Please. Michael is hardly a saint; if you're going to say something mean about him, why completely make it up?
On the flip side was Paul Carr's column in the Guardian. Paul-- like the Gawker crew-- is outrageously snarky. And really, he's far better at that game than most of Gawker Inc, his excellency Nick Denton aside of course. Paul brilliantly writes about the online currency of mean, which I've written about a good deal too, but he writes about it from the point of view of someone who profits off of doing it, not being the subject of it. Paul and I are good friends, which strikes a lot of people as weird, since I'm one of the people he has profited off trashing. But if you read that column, you understand why.
The reason I'm so speechless given all the strong feelings I have about this issue, is that I fear there's no solution and that worries me. If Ivory Tower print media is truly dying, and we're all going interactive, it's going to severely limit the pool of people willing to be journalists. It's one thing to expect this kind of abuse and scrutiny if you're a Hollywood celebrity, a public company CEO or a politician. But someone writing about startups? Why? That shouldn't come with the territory. We shouldn't even be that interesting!
If Michael stays away longer than a month--which I don't think he will--it will be a huge loss for Silicon Valley. Look at TechCrunch50; look at the Crunchies; look at the daily blogging of a broader swath of tiny unheard of startups than any other site. TechCrunch is the best friend entrepreneurs have had over the last few years, and no offense to the team there, but Michael is hands-down the best blogger on the site.
As for me, I have no intention of running away. For one thing, a lot of the abuse I get is because I'm a woman. (Trust me, you just don't want details here.) For the sake of other women, I'm not letting anyone get away with that kind of gender bullying. But there may well come a time, as it has for Arrington for now, where my safety and the toll it takes on my loved ones is just not worth writing another story.
An unforgettable portrait of the emerging world's entrepreneurial dynamos Brilliant, Crazy, Cocky is the story about that top 1% of people who do more to change their worlds through greed and ambition than politicians, NGOs and nonprofits ever can. This new breed of self-starter is taking local turmoil and turning it into opportunities, making millions, creating thousands of jobs and changing the face of modern entrepreneurship at the same time. To tell this story, Lacy spent forty weeks traveling through Asia, South America and Africa hunting down the most impressive up-and-comers the developed world has never heard of....yet.
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