In this week's Disruptors episode, I visit Zink in Waltham, Mass. Zink is a spin-off from Polaroid that has developed an inkless printing technology. The ink is in the paper in the form of special dye crystals that turn different colors when heated. By getting rid of the ink cartridges and associated printer heads, this will allow for the creation of compact, mobile printers that can be embedded into digital cameras, laptops, and even cell phones. Watch the video.
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For the September cover story of Business 2.0, I put together our second annual list of some of the most disruptive startups on the planet. This really brings things full-circle for me. I started out with a Disruptors cover story last year, which led to a conference series, which spawned a Web video show, which (naturally) gave rise to this second magazine cover story.
The companies that made it on this year's list are:
1. Blinkx (video search) 2. Raydiance (ultra-short pulse lasers) 3. Expensr (Web-based Quicken) 4. Zipcar (car-sharing done right) 5. MFG.com (an eBay for manufacturers) 6. Virgin Charter (Expedia for air taxis) 7. PatientsLikeMe (patient-to-patient intelligence) 8. Bloom Energy (distributed power) 9. Vanu (software-defined radio) 10. Zink (inkless, mobile printing)
Dalton Caldwell is finally finding his groove. His Sequoia-backed social network, Imeem, started out a couple years ago as a standalone, instant-messaging application. He soon scrapped that in favor of a Web-based social music site. But then, a victim of his own success, Imeem was banned from MySpace and threatened with a lawsuit from the Warner Music Group.
Caldwell, though, has turned all of that around, and made Imeem into a legitimate, ad-supported music streaming site. He won over Warner Music, which dropped its lawsuit and licensed its entire catalog of songs to Imeem in return for a share of the advertising revenues associated with its music. In fact, Warner Music CEO Edgar Bronfman, Jr. found the relationship with Imeem important enough to highlight in Warner Music's most recent earnings conference call.
Now, not only can you listen to songs from indie groups like The Essex Green (and embed them on your blog):
But you can also also listen to Warner Music acts like the Red Hot Chili Peppers and embed (30-second samples of) those as well:
Imeem claims 16 million unique visitors in July, 10 million registered users and more than one million unique logins a day. Third-party measurement site Compete.com puts the number of unique visitors at 4.6 million, but shows that U.S. traffic is growing and beating both Last.fm and Bebo (see graph above).
Comscore shows Bebo slightly ahead of Imeem in the U.S., with 4.4 million visitors in July versus 3.9 million for Imeem (and 1.8 million for Last.fm), but more notably shows an astounding 4,224 percent growth in traffic for Imeem compared to the same month last year. (This compares to 112 percent growth for Bebo, and 59 percent growth for Last.fm). No matter how you slice it, Imeem is rocking.
Caldwell dropped by my office earlier this week to explain his strategy. He wants Imeem to become the first major ad-supported music streaming site, and he is working on landing deals with the other major labels to make that happen:
If you create an adversarial relationship with the labels, you
are screwed. If they want you to succeed, you will have a much easier
time.
Facebook only opened up its social network to outside applications last May, but already there are 2,960 of them. And the top apps are being snapped up by larger companies. For instance, Slide acquired an app called Favorite Peeps in June.
The latest rumor in this regard is that TripAdvisor is paying $3 million for a mapping application called Where I've Been. (Update:Looks like this rumor turns out to be not true, but there is obviously a general Facebook feeding frenzy going on). That's would be a nice check for Craig Ulliott, the sole developer who cobbled together the Facebook app in his spare time. It used to be that a few smart engineers could build a Web 2.0 site, and if i took off, Yahoo or Google or some other large company would buy it after a couple years for as much as $30 million. Now all you need to do is build a blockbuster Facebook app, and you can be bought for $3 million after just a few months of work. If you are only one person, and you own the entire company, you could end up with almost as much on an individual basis as if you owned 10 percent of a larger company. The race is now officially on to buy the most successful Facebook apps.
Still, the majority of these Facebook apps are nothing more than features. It's just that anyone can buy a features on Facebook these days, not just Facebook. Where I've Been is a widget you can put on your Facebook page and mark
each country or state you've ever visited or lived in, and then show
off how well-traveled you are to all your friends. How TripAdvisor plans to make money from that is unclear. But it paid $1.30 for each of Where I've Been's 2.3 million users. That is probably a population with a high percentage of avid travelers, the type of people TripAdvisor would like to lure to its site or sell travel-related advertising against. So really what it bought is a highly targeted list of leads.
JibJab has finally launched its "Starring You" series, where you can upload your head into a JibJab animated video (you can see me and my wife shaking it above). This an example of giving average people the tools to create high-quality content (see previous post). I broke the "Starring You" story a month ago in one of my Disruptors videos.
The culture of participation is gaining steam in the gaming arena. Kongregate, a site that lets users upload their own simple Flash video games, announced today that it raised $5 million in a venture round led by Greylock Partners. Web 2.0 angel Jeff Clavier is already an investor. These tend to be simple games, but the site seems to be gaining some traction, with 750 developers having uploaded 1391 games since the site's public launch last March. That in turn is driving some gains in traffic.
But Kongregate is not alone in the quest to become the YouTube of online video games. A newer startup out of England called YoYo Games, which I highlighted in this year's Web 2.0 map of the world, just launched a couple months ago, but already boasts 5,510 user-submitted games. One reason why YoYo Games has been able to seed its site with so many more games in a shorter period of time is that it offers a free software download called Game Maker that pretty much anyone can use to create their own games.
While Kongregate still seems to be drawing more traffic (at least, according to Compete.com), the more games on a site, the more likelihood that any one of them will turn into a hit. So the race is on.
Sites that are driven by audience contributions—whether they revolve around video, photos, music, or games—need to start helping their members create better entertainment content. Those who do will have a better chance of separating themselves from the pack. For that reason, my money is on YoYo Games.
If there ever was a disruptive technology, light-emitting diodes (LEDs) certainly fit the bill. They are slowly but surely taking over more and more lighting applications, from cell phones and signs to street lamps and indoor lighting. Only in recent years, though, have LEDs that produce white light come into their own. Since LEDs are semiconductors, they are still climbing a technology curve that will make them brighter, cheaper, and more energy-efficient. One day, they may even replace the lowly light bulb. And that would be a good thing, snce lighting consumes about 22 percent of all of our energy.
In this week's episode of The New Disruptors, I visit John Edmond and John Palmour, the co-founders of LED-maker Cree in Raleigh, NC (see earlier post here) to find out how far these little lights can go. I also talk to the mayor of Raleigh, which is replacing all of its outdoor municipal lighting with LEDs to save on the city's energy bills (Toronto is following suit). Watch the video. Full transcript after the break.
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Cable companies may hate TiVo, but at least they've come to accept that digital-video recorders are here to stay. Or have they? Time Warner Cable is introducing a DVR-like service called Look Back that lets viewers time-shift shows but doesn't let them fast-forward through the ads. (Time Warner Cable is a sister company of my employer, Time Inc.).
From a viewing-experience point of view, Look Back is a step backwards compared to a full-throttled DVR like TiVo. You can only watch shows from earlier the same day and you are forced to watch the ads. The whole point of DVRs is that they allow you to watch shows when you want to watch them, which might include catching up on a whole week's worth of The Daily Show at 3 AM on a Saturday. Being limited to one day's worth of TV sort of defeats the purpose.
And don't underestimate the appeal of being able to skip through the ads. It makes the TV-viewing experience both more enjoyable and more efficient (you can watch more actual TV when you strip out the ads).
So what are the folks at Time Warner Cable smoking? They are betting that people will put up with their hobbled, networked version of a DVR because it will be free. (TiVo, in contrast, charges an extra $13 to $17 a month for its service). It's amazing what people will put up with if they think they are getting something for free.
But this is a stop-gap measure at best. If the cable companies really want to counter the threat of TiVo, they are going to have to come up with a service that is better than TiVo. Not one that is worse, but free.
How much froth is there in the online ad industry? One market signal comes from a leaked private-placement document for Glam Media, which is trying to raise an eye-popping $200 million (which is very large for a private deal). Allen & Company and Bank of America are raising the round on behalf of Glam. According to the leaked document (thank you, TechCrunch):
Glam Media is the fastest-growing web property in the United States based on the year over year increase in unique visitors from 782,000 to more than 19.1 million monthly unique visitors in June 2007.
Except that it's not. Glam Media owns a collection of women oriented sites, including its flagship Glam.com. But the bulk of those 19 million visitors comes from the ad network that it runs for other sites like MyYearbook.com, QualityHealth.com, and Kaboodle (which was recently acquired). In other words, Glam Media is trying to tell prospective investors that because it serves up ads on a site, the visitors to those affiliated sites should count towards its own total as a "web property."
Yet, according to comScore, all of Glam Media's sites accounted for only 1.6 million of those 19 million visitors in June. And Glam.com itself only accounted for 654,000 visitors. Some of its lesser sites include Celebrity-Hairstyles.org. The fact is that the bulk of Glam Media's traffic and revenues comes from its ad network, not its web properties. Trying to sell itself as the No. 1 destination on the Web for women is misleading at best.
Hyperbole aside, there is nothing wrong with being an ad network. In fact, they are in great demand. But if investors cannot even trust Glam Media and its bankers to describe the business properly, how can they put any faith in the revenue and cash-flow projections set forth in the private placement? (The numbers go from an estimated $21 million in revenues this year to $150 million next year and $392 million in 2009. Meanwhile, cash flow (EBITDA) is shown going from a loss of $3.7 million this year to $119 million in 2009).
If this deal gets done, it will be as good a sign as any that we are now officially in Bubble 2.0 territory.
This week's New Disruptorsvideo is up on CNNMoney. In this episode, I speak with Vanu Bose, the founder of Vanu, about how wireless networks could be more like the Internet if they were open to all devices (as the FCC is requiring in the rules for the upcoming auction of broadband spectrum). Vanu's technology, software radio, can help connect multiple wireless standard to the same network, whether it's GSM, CDMA, or iDen. Thus, the open-device rules could really play into its hands. Vanu is also an investor in Frontline Wireless, which was hoping to use Vanu's software radio technology to build a network that could seamlessly switch to support public-safety radios in cases of emergency. Frontline's plan looks like it may be in jeopardy now, but Vanu still hopes to cash in on the need for device-agnostic wireless networks.
In this week's Disruptors episode, I visit Zink in Waltham, Mass. Zink is a spin-off from Polaroid that has developed an inkless printing technology. The ink is in the paper in the form of special dye crystals that turn different colors when heated. By getting rid of the ink cartridges and associated printer heads, this will allow for the creation of compact, mobile printers that can be embedded into digital cameras, laptops, and even cell phones. Watch the video.
