Sarah Lacy has reported on startups and venture capital in Silicon Valley for nearly a decade. She writes Valley Girl, a biweekly column for BusinessWeek and co-hosts Tech Ticker on Yahoo! Finance. She lives in San Francisco. Learn more
"By tunneling deep into their pasts, their paranoias and anxieties, their troubled romantic relationships, their outsize dreams...Lacy delivers a sophisticated psychological study of an ascendant economic class."
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!
My new goal is to get Jeff Bezos on TechTicker. That's right. Fair warning Mr. Bezos: You are the new Moby Dick. (Larry Ellison, you toyed with me for too long.)
Since I've historically been a Valley beat reporter, I've never gotten to interview the Seattle-based Amazon CEO, and I am increasingly amazed with his leadership. Om Malik put it best on TechTicker several months ago, when he said Bezos is the closest thing any Internet company has to a Steve Jobs. Before you hit that comment button: Larry and Sergey aren't CEOs, and Facebook is too young to call.
First off, there are almost no tech founders who remain CEOs from starting a company through its IPO and beyond, particularly given the short-sighted nature of Wall Street these days. The only other one I can think of is Ellison, who I've said before deserves to be the highest paid CEO in tech, for his uncanny ability to get where his business is going from a technology point of view, a market point of view and a business point of view.
But more than that, Ellison is that rare breed who can inspire and terrify his people at the same time, and exert enough authority that Wall Street doesn't question him. Ok, maybe the question him, but they'd never dream of ousting him even in the bad times. In fact, over the last few months while everyone has been saying no other tech CEO has the same value to his company as Jobs, I've argued Ellison is a less-sexy version of the exact same dynamic. (By "less-sexy," I mean he sells databases and middleware, not iPhones. I only swoon for Mr. Lacy and this man.)
Bezos is the only CEO of the Internet generation cut from Ellison cloth. He has routinely stood up to Wall Street and was often considered an absolute dog next to eBay's "monkeys-could-run-us" lean and mean business model. Nonetheless, he thumbed his nose at Wall Street with his famous chortling laugh, which you can hear in the clip below.
Similarly to Ellison, Bezos was a visionary in terms of product (cloud computing and the Kindle), knowing his customers (a brilliant user interface, pioneering recommendation engine technology that actually works, and Amazon Prime) and business (investing more money and continuing to discount quarter-after-money-losing-quarter believing volume would win out in the end).
So I know what you're thinking: What about that Internet "four year curse"? Well, it only holds true for the do-no-wrong Internet darlings like Yahoo, eBay and Google. Amazon never quite fit that. It never had a golden-goose of a business model, so it never got lazy. It never had the luxury to get lazy.
In fact, Amazon is increasingly the exception to not only to the four year curse and the horrific 2008 fourth quarter, but a lot of stories I write. Back in August, I wrote about the antiquated publishing industry. One solitary bright light: The Kindle, which the fourth quarter results showed actually boosted book sales, something so counterintuitive even Amazon-bull Henry Blodget totally mis-calls it in the above video. In a time when Borders is fighting for its life and Barnes & Noble had to cut jobs for the first time in its corporate history, that's nothing short of amazing. (And as a reporter pitching a new book, I'm nothing short of grateful.) You have to wonder whether Bezos sold his soul to the devil during one of those post-2000 quarters when it looked like the company was going to go belly-up.
Then there was my December column on how stagnant ecommerce has been since the 1990s. My one exception? You guessed it: Amazon. There are a zillion small reasons why I always try to make purchases on Amazon, despite that old conventional wisdom that you can't build loyalty in ecommerce because it's so easy to click to a cheaper competitor. Among my reasons: Amazon's superior user interface and search, the ease of one-click purchasing and free overnight shipping via Amazon Prime, and the affiliate system. Amazon has given me more than $1,000 in credit this year, thanks to people clicking through my site to buy my book and other items on Amazon. Speaking of, anyone need to do some shopping? That link is up and to the left...
So, keep up the good work Mr. Bezos, and just know that me and my camera crew are coming for you.
Trying to get back to some regularity with my BusinessWeek columns. This one posted tonight for tomorrow, and I'm quite proud of it. It keys off a lot of things I've been writing about on this blog: The hollowness of engineering traffic, obnoxiousness of sites like Twply, and my frustration with too many people trying to game the system versus just build a good product or create good content. It all came together around this idea of Web 2.0 killing the last metric that matters for advertisers: The unique user.
It was an observation Roger McNamee made in the Yahoo greenroom when he came by the studio a few weeks ago, and it's been working its way around my head since, so I fully credit him.
Speaking of Valley Girl, here's my previous column in case you missed it. It has to do with corporate layoffs and features a shout out to Mr. Nathan Wright of Des Moines who I met on the book tour!
If you read the blog a lot, you probably notice a lot of similar themes work themselves out here, then later wind up in a column or on TechTicker. Writing is like thinking, and my commenters always help me sharpen my thinking. You let me know when I'm on to something and push me on another angle when I'm blind to it. So thanks, everyone. Instead of cutting you in on my paycheck, I'll just refrain from annoying you with ads on this site. Deal?
NOW, speaking of Roger McNamee, I have some news. He cut his hair! Background: Roger's hair ignited quite an uproar among TechTicker commenters. I'm sorry-- he's Roger McNamee, a former top fund manager and one of the most successful Valley investors and he's giving you investing advice and you're upset about his hair??? As I Twittered at the time it was an act of civil disobedience against the policies of the Bush administration. Roger says once he got confirmation that Bush was safely back in Texas he cut off a whopping 14 inches giving it to Locks of Love. I don't have an "after" picture, but below is the before, in video form:
SO. After a whirlwind 2008 where I met entrepreneurs in about 25 cities or more, I am finally back in San Francisco for a while.
I feel very torn. It's been an amazing year, and I've met so many amazing people. My entire concept of entrepreneurship has been forever changed, and I am, of course, so grateful for the outpouring of support for the book. It's been one of the toughest book-buying markets in publishers' memories and it was no small feat to keep copies moving!
On the plus side of being home, I've barely gotten to live in the house that's continually draining my bank account lately, and it's always nice to see my husband. I also feel like meeting so many entrepreneurs around the world has come at the cost of not staying in better touch with entrepreneurs in the Valley. So it'll be nice to stay put for a bit and reconnect. And what better time than a month with a zillion Holiday parties? Headed to the Zynga party tonight, and of course, there's the sarahlacy.com happy hour at the Beauty Bar in one week! RSVP, y'all!
Here are Olivia and I after the spectacular Get Satisfaction party last Friday, inhaling some Arinell's pizza. (Just a few blocks from my house-- another win to being home!) [photo credit: Geoffrey Ellis]
Of course, another *huge* plus in being home is that I can focus more on my actual job: reporting. I forgot to mention it, but I re-upped my columnist contract with BusinessWeek in November. I was incredibly flattered to even get it renewed given the macro state of the economy and how hard hit media has been already. (And how flaky I've been on deadlines. Doh.)
I wrote two columns that detailed *why* things are going to be far worse for Venture Capitalists in this downturn, even as the Valley will have an easier time than in 2001-ish. You can read them here and here. Then, this week, I wrote about everything that's wrong with eCommerce and why I think we're about to see an explosion of innovation. (And why I can't wait!) I've got a lot of great ideas for the next few months, but as always hit me up if there's a topic you want me to tackle!
I've also been pretty busy at TechTicker. A few recent videos I liked on the jump!
A whole slew of other changes are in store for my various jobs and include a few new projects that I can't wait to tell you guys about. But more details on all that later... Bottom line is I'm mostly out of promotion mode (FINALLY!) and solidly back in reporter mode so more great content coming your way this month and in 2009.
Some of us (Read: those who don't plan/have a book to promote in November) choose to go to London at a different time than everyone else in Silicon Valley. So since I'm the only person in the Valley not at FOWA in London right now, I didn't hear Kevin Rose's keynote. But apparently I didn't have to. It nicely echoes what I wrote here: That Digg has picked a fork in the road and is ready to grow up and prove it can be more than a fan boy site filled with Microsoft ads. (Convenient timing for me too, since I'm updating "Once You're Lucky" for paperback.) As someone who has spent a lot of time giving Digg tough love, but also defending what Kevin and Jay have done well, I'm rooting for them.
(Sorry for the crowing, but I'm getting a lot of kudos on my latest Valley Girl column and am enjoying feeling like an actual reporter again today, less obnoxious self-promotional media persona. Well, except this somewhat self-promotional post and my upcoming interview on KQED's Forum in an hour...)
Oh, yes, I do actually still write a column for BusinessWeek. I think this was ideally supposed to run about a month ago, but it's finally out today. For loyal readers of my site, this won't be incredibly new. I've blogged about this angst a lot, and it was the subject of my blog-like, town-hall style keynote at Gnomedex in September, which as you can see actually greatly influenced my thinking about the topic towards the end of the column, so thanks again to all the participants.
But, if you don't mind, click on the link anyway. I'm renegotiating my contract with BW as we speak and it'd be nice to look like I generate traffic! ;) As, always, thanks to Tom Giles for putting up with my wacky schedule and being an awesome editor.
I have a pipeline of column ideas I can't wait to get to, and now that the tour is wrapping up, I'll have a little more energy to throw at them. Looking forward to a few months of being sarah lacy (lowercase) and not SARAH LACY TM and just doing some good reporting and writing again.
....Including a new chapter for the book's paperback release next spring!!! Everyone I've told that to has asked if they get some kind of discount if they already bought the hardcover, like when Jobs gave people those iPhone rebates. I love geeks.
Last month I wrote a column for BusinessWeek about the hidden-- and substantial-- marketing costs of software as a service and it created a bit of a stir. The theme of the piece was that the Internet had killed what was once the greatest tech business model: shipping a CD of software that was too brutal to rip out and charging millions for upgrades not to mention ongoing maintenance fees. The business model that built Microsoft and Oracle and SAP, and the business model that injected profitability and growth into maturing hardware names like Hewlett-Packard and EMC.
Of course, the SaaS model-- while bad for investors and would-be tycoons eying all of Larry's yachts-- is great for customers and for those entrepreneurs who were nimble enough to "get it" ten-plus years ago. As much as I firmly as I believe the myth of the magic SaaS business model needs to be busted, I never once disputed that SaaS wasn't the future of software. Think of it like the record industry: Is an Internet world better for label tycoons? No. But it's better for customers and, well, it's a reality.
Recently, we've seen a few signs of old software grappling with this reality. One is trying to figure it out. Another is just pretending the big, loud, SaaS elephant trumpeting in its ear isn't in the room.
Here's my latest BusinessWeek column. It started out as a blog post but got longer and longer so I transformed it into a column instead. It's about how the publishing industry needs to be as transformed by Web 2.0 (aka community, interaction, marketing) as it was by Web 1.0 (aka transactions) if it wants to stay vibrant. (Fitting since I'm in Amazon country today!)
In case it wasn't clear: I actually had a near-fairy tale experience with Gotham so its not a bitch-fest at all. I just want publishing to stick around as a viable industry! Now, to the next task at hand: My Gnomedex keynote! eeeeek.
Here's my latest Valley Girl column, which is the fourth most read on the site today much to my delight! It's always a surprise to me which columns resonate and which don't. Anyway, check it out here.
(OK, I admit "Don't Cry for Us" is better than my original title "What's Up, Bitches?")
It's interesting because at breakfast today in Omaha one of the guys was asking about how to get more women involved in the entrepreneur scene and I didn't have any Valley learnings to pass on because we clearly haven't cracked it either. That lead to a discussion of whether you can have it all and balance family and building a company. I know it's controversial, but I don't think you can, which is a big reason I don't have kids. (Mom and dad if it makes you feel better you can add "yet" to the end of that sentence.) I am in awe of women like Tina Sharkey who can somehow do it.
A few other factoids as I've been thinking about this issue.
...And I am officially exhausted!! more photos and blogging about my time in DC to come. For now, breakfast with my husband in New York. I think I remember him...
