A year ago I wrote about how the involvement of various media companies in in open source software was worth paying attention to. It still is, but it is equally interesting to see commercial vendors back successful OSS that, on the surface, looks like it may be competing with their paid products. One such project is Adobe’s Brackets [home | Github], an excellent free code editor that has been going through rapid iterations and impressive adoption by developers – both those working on the software itself, and the broader population of people simply using it. Read More
If they really do have 2,000 Pro members at $49/mo or $399/year, that’s around $1M/year provided there’s not egregious churn and depending on the monthly vs. yearly mix (I suspect there’s a majority of monthly subscriptions). Those are their self-reported numbers but the service seems well executed and I have no reason to doubt their data. Impressive in just a year (here’s a post about their premium launch), as is the conversion rate out of their 70,000 member base. They do a good job at spelling out the value of their subscription product, in fact I might give it a shot. It’s refreshing to see people who don’t buy the hype about ad revenue trees growing to reach the sky. See also some notes on how they built up traffic those last couple of years.
07/01/10 update: SEOmoz’s Venture Capital Process
A few months ago, a rep at Rackspace (one of our two hosting companies at the time) laughed at me when I unfavorably compared their bandwidth rates to Amazon’s. I mean, he actually laughed. I probably got started in the IT business before the brat even got out of high school. They chose to have a different business model than Amazon, told me the smug fuck. Well dude, when a behemoth such as Amazon, which probably spends more on IT each year than your company is making in revenue, choses to enter your market, you pay attention rather than dismiss it outright. I guess your business model is “charge ten times what Amazon charges for the pretty much the same bandwidth, only insult your customers for the privilege.” How about paying a little respect?
So Racketspace at the time strong-armed me into renewing for another six months to avoid bandwidth overuse that was mostly their fault because of poor application monitoring. They wanted to charge us thousands of dollars for traffic between a web server and a database server that we had put on the same LAN on purpose! The bottom line is, we’ll be finished with Rackspace in a few weeks (still a few domains to migrate) and I’ve made it company policy not to do business with them from now on. Memo to Rackspace: Economics that are impossible to stop. (Well firing the biz dev people in charge of our account would do the company well too, but I suspect their behavior was par for the course for a company whose support reputation is way oversold.) I’m sure Rackspace works for some people, if you like being gouged with bandwidth rates from 2003 that is.
For people looking for hosting, if you don’t have your own sysadmin, Pair.com is a much better host than Rackspace. We have our own sysadmin now though, so we’re in the process of leaving pair.com too since they don’t provide root access on dedicated leased servers, which if you ask me is crazy. We get much more powerful servers for the same price at Canvas Dreams and can fully administrate them, save for remote rebooting I’m told, which should be rolled out soon (insert protocol name I can’t remember).
My friend Tig and I are proud to introduce Defense Industry Daily, a niche blog/online trade rag dedicated to defense contractors and procurement managers. Like MarketingVox, the publication is medium-agnostic and accessible on the web, by RSS and by email (the later will be introduced shortly). DID is edited by Joe Katzman of Winds of Change fame who’s up to a great start. Did you know about EPA-approved nukes?
Expect more such niche B2B blogs from us at our deliberately slow and quiet pace. Most people are excited about getting $2-10 CPMs and that’s great. Advertisers in the defense industry are welcome to get in touch with us to inquire about our rates and formats – we believe we’ll quickly attract the right audience for them. Feedback on our content (focus and tone) is of course welcome as well.
Peter Merholz observes that R&D departments within large corporations, be they in the pharma or software industries, have a hard time getting their research papers and prototypes translated into actual products. I don’t necessarily agree with Peter’s admittedly cursory opinion of Microsoft Research, whose output actually happens mostly under the hood in the database space, with patents to boot. (Whether Microsoft eventually reaps all the benefits from that research remains to be seen — look how Oracle was built upon IBM work or how frustrated TI people left to create Compaq.) I’m also curious about what will come out of the new, smallish Greenhouse created by Jeff Raikes “to identify and cultivate new software applications.”
Whatever happens in the specific Microsoft case, the larger point seems to hold. In many industries big companies should probably focus on being platforms or carriers focused on logistics, marketing or distribution, from which smaller companies can take off and innovate. Let the small fish worry about granular customer requests and the concrete products to match them, because the big whales are not going to be responsive enough anyway.
Instead of gobbling those innovative start-ups and turning their output into the same old boring morass, the behemoths might act as service providers but let product development remain in separate, nimbler structures. And tiny but committed software developers such as Ranchero Software or NewsGator Technologies are probably more in tune with the official UI and development guidelines provided by Apple and Microsoft respectively, than people writing apps for these vendors themselves, so that semi-independence would not necessarily mean a loss of alignment.
CFO.com: Never Mind the Music
"Beyond the digital revolution, however, there’s arguably a much more profound transformation going on at EMI. As Faxon explains, during the growth years of the 1960s, ’70s and ’80s – "when we were cash machines" – EMI was like all the other record companies, "putting employees first, then the artists and finally the shareholders." His aim since becoming group CFO has been to turn that perspective around, so that "shareholders come first, then the artists and then the employees. It changes the way we think. If you take the shareholder view, that means you’re looking at long-term value growth.""
EMI’s CFO has the candor to admit that companies in his industry don’t focus on their customers.
"Moral hazard happens when the actions of an agent can be hidden from a principal, creating agency costs – because the agent is able to shirk, take additional risks, and generally not deliver on his end of the bargain. In this case, the moral hazard is that the record industry, because listeners can’t monitor or influence it, can effectively shirk, and choose artists not based on listeners’ preferences, but based on business efficiencies. This is effectively what the record industry has been doing – adding massive agency costs that replace the search value it is supposed to provide."
Knowledge@Wharton Online music’s winners and losers
This moronic article takes the current recorded music value chain as a given basically swallowing the whole RIAA party line), without even questioning the 99-cent-a-song pricing. Guys, this is a digital product. We’re talking about moving electrons and bits of content that has for the most part been amortized already. The cost is so low delivery is basically free on a per-song basis. In the face of changing consumer demand, no matter how hard RIAA members try to stick to their cartel solidarity, the same kind of pricing pressure that is destroying the long distance and international phone call troll tax is going to work in the music business as well.
Do a couple searches on Buymusic.com and it’s obvious they don’t care about music at all. From spelling mistakes (for instance "Anne Peebles" — it’s Ann) to the underlying assumption that the track is the core product, this is an amateurish effort from a web delivery perspective, and an insult to the music lover.
A few things Buymusic.com needs to do to begin to be able to be taken seriously:
"In 1903, when Henry Ford launched the Ford Motor Company, his third attempt at making cars, automobiles were high-priced, custom-made playthings for the rich. What