Awakened Voice

There are a number of web based services that I use on a daily basis that I find to be very useful. I use FriendFeed to keep track of the postings from people who I find interesting.  I’ve been using Seesmic Desktop recently to keep track of activity on Facebook and Twitter.  I also use Google Reader to keep track of news and blog posts via their RSS feeds.

All of these services have a certain level of importance to me but I know that eventually some of them will be gone. The short answer as to why they will be gone is “money.” None of these services has any appreciable revenue streams relative to the costs to run them. As far as I know only Facebook (via advertising) and Twitter (via a small amount of advertising) have any sources of revenue. Seesmic Desktop, FriendFeed and Google Reader seem to exist on the power of previous investments alone.

The ability to earn revenue from customers is only one factor in the survival equation. Access to capital is another factor. As a part of Google, Google Reader has no capital worries. You could even argue that Google Reader does have a revenue stream because it allows the presentation of Adsense in RSS feeds which Google earns revenue from. Facebook also has access to substantial capital due to the sheer size and growth potential of their service.  Even so I think that there’s about a 10% chance that Facebook fails at some time during the next five years. Even as the growth of Facebook makes the service more valuable the cost of running the service grows as well.

Twitter, FriendFeed and Seesmic are in a much less enviable position. Much has been made of Twitter’s growth in recent months. It’s true that Twitter’s traffic numbers have exploded but who really knows what traffic and registered users are worth these days? Traffic and users are certainly not worth what they were two years ago when cash was flowing freely into the Web 2.0 space. Given the buzz around Twitter I think that they could be able to raise more capital if they needed to. Then again, each time Twitter (and Facebook for that matter) raises capital they dilute earlier investors and shareholders. That can’t sit well with employees who are banking on a big payday at the end of the rainbow. Heavy users of the service are the ones who need to be concerned though. A lot of social marketing campaigns and 3rd party application developers are counting on the success of Twitter. Twitters lack of revenue after two plus years in the marketplace should worry these folks. I think there’s a 25% chance that Twitter fails during the next five years.

FriendFeed and Seesmic are in the most trouble. FriendFeed is a service that is useful for heavy web publishers and the people who follow them. But how many people are heavy web publishers? It’s a very small slice of the web publishing market. For every Scobleizer there are thousands of casual publishers who can make do with the functionality offered by Facebook. I also think that followers on FriendFeed are more likely to be “friends” in that special web 2.0 category as opposed to real friends and family that people are connected to on Facebook. So while FriendFeed has value that value exists in a deep niche of web users. I don’t think advertising will work well with the users on FriendFeed. So FriendFeed will either have to start charging for something (an iPhone app maybe?) or be sold to someone with deeper pockets in order to make the service work in the long run. As such I feel that there’s at least a 50% chance that FriendFeed fails within the next two years.

Seesmic has the toughest road ahead. The core Seesmic video conversation service had a lot of early buzz but that buzz has since died down. The fact is that most people are not prolific publishers with video. And it’s also a fact that video is expensive to store and stream. So at some point you either have to charge for the video service or you need to integrate large amounts of advertising. Seesmic has done neither. Seesmic is also the only startup service in this list that has done layoffs. The Seesmic Desktop application has increased interest in the company. How does Seesmic capitalize on a free desktop application? The only two methods are advertisements and charging for the software. It’s hard to charge when competitors (such as TweetDeck) exist and would probably continue to offer their application for free. There’s no loyalty in Web 2.0 land. Most people would defect to a new tool rather than pay. Advertising might bring in some revenue but would probably cause people to switch services if the other comparable service is not inserting ads into the stream. It’s a tough situation. So unless Seesmic gets bought out I think there’s a 75% chance that they fail within the next two years.

The possibility of the failure of a web service where I publish or store information is something that I consider when determining how much time to invest on that service. Of all the services on this list the one that poses the most risk to myself is Facebook. FriendFeed is mostly an aggregator of things I publish elsewhere. Twitter is a place where I publish links and short messages but I don’t consider the content I post there to be particularly important. Seesmic desktop is a tool that helps me watch activity and can be easily replaced. I use Google Reader to share and comment on news and blog posts but I also think that there’s no chance that Reader is going away anytime soon.

I take steps to mitigate my personal risk by not putting too much effort into any one service. I have the most exposure to a Facebook failure but I also limit the amount of things that I publish there. I don’t rely on any single service to promote the myself, build my network or socialize. I’ve got my own domains running my own versions of web applications that act as the cornerstone of my presence on the internet. I see many people (and even businesses now) that increasingly rely on some of the services mentioned in this post (and others with similar risks) to build and maintain their presence on the internet. To them I say beware. Some of these services are doomed and if you rely on them too much you stand to lose a lot when they fail.

Do you remember that old Toys R’ Us jingle? “I don’t wanna grow up. I’m a Toys R’ Us kid…” Lately I’ve been hearing that in my head but with slightly different lyrics. “I don’t wanna grow up. I’m a Web 2.0 kid…” It’s time to grow up Web 2.0 kids. It’s time to go out an actually earn some revenue from paying customers. It’s a big step I know but failing to take this step means you’ll be living in your parents house forever, with mom doing the laundry and dad giving you dirty looks each time you head to the pub for a pint.

I know that the Web 2.0 hipsters don’t actually live with mom and dad. Well maybe some do. Most are living in lofts in Williamsburgh or cramped apartments in whatever hip sections (the Mission District?) there are in the San Francisco area. And instead of mom and dad you’re being scrutinized by your venture capitalist investors or (even worse) the friends and family who emptied their bank accounts hoping for a shot a internet millions. Stop the insanity and start generating a return on their investments now.

Who Funds Web Based Services?

I think that the general understanding of the economics of doing business via the web has been distorted over the past few years. When the dot com bubble burst back in 2000, earning revenue via web based services seemed like the sensible thing to do.  The door to public investment dollars closed tight. After a few years private investments began to flow back in to the internet space. All it took was a couple of high profile acquisitions of web companies (like Google’s acquisition of Blogger in 2003) to start a new gold rush.

The dot com bust had dashed the dreams of many a big thinker who hoped to take an idea with little prospect of revenue and turn it into a windfall. Now the prospect of initial private investment and a later acquisition emboldened them once again. Ditto with the VCs. Once again a genuine path to a profitable exit existed.

To a large extent the current Web 2.0 phase has been funded by tech giants like Amazon, Google, Microsoft, AOL and Yahoo! These companies are like the Fannie Mae and Freddie Mac of the internet industry. They sat there waiting to buy or heavily invest in fledgling companies (like Flickr, Delicious, Jaiku, YouTube, Facebook, Audible and more) to add to their portfolios. The problem is that these internet giants don’t have the same appetite for acquisitions anymore. So even though venture capitalists have been funding internet companies they have been emboldened by the expectation that the bigger fish will come along and swallow them up.

Another phenomenon certainly added to the pool of capital available to intrepid internet entrepreneurs. Former Google employees whose bank accounts were bursting due to Google’s fantastic stock price gains left the company to become venture capitalists or start internet companies (like FriendFeed, Twitter and Howcast) of their own.

So venture investments lead to companies being acquired which then creates more investors who either create their own web services or invest in others, which increases the demand for more internet services which provides generous incentive for would be internet gazillionaires who want their piece the pie. Got it?

Who Gains From This Economy?

It works much like a good ole pyramid scheme. Those who get in early have the highest chances of cashing out big. The venture capital deals are structured so that the investors are very protected and have the first crack at any capital generated by an acquistion. So the VCs certainly have gained over the last few years.

Companies that offer services to these fledgling web companies also gain as well. It seems like every web company that has popped up over the last couple of years has relied on Amazon Web Services to power their infrastructure. And Google Adsense has become the default revenue source for many Web 2.0 services.

The rush of new web services has also given way to a monetized tech blog phenomenon as people seek to find a guide to the shiny new services and inside information on the deals that may or may not occur. Sites like TechCrunch, Mashable, ReadWriteWeb, Engadget, Alley Insider and many others have grown from the blog category into revenue generating digital publications, read by hundreds of thousands, and supported by fledgling web services who either pay for advertising or supply juicy information. It’s a real circle of life folks.

What’s Changing?

A lot is changing. You see, the financial world has it’s own circle of life. And no matter where you touch the circle you see changes. For example, I’m sure that their are lots of people in Silicon Valley whose wealth was derived in part from real estate. Some took home equity loans in order to invest in venture funds. Some sold homes for outrageous gains and that provided capital to invest in (or start) web companies. Now that the real estate markets have collapsed those folks are hurting bad right now if their investments haven’t already cashed out. In the past these people could go to the banks to get money to tide them over but the banks have crashed too. Because of this situation the traditional tech fund investors are much less likely to invest. That’s dead end number one.

Because people have been hurt in real estate and don’t have the stomach for investing many stocks have fallen sharply over the past year. And the fall in stock price has caused all manner of debt tied to company valuations to come due. So most big internet players have to focus on cutting back to shore up their balance sheets. That means no paying $800 million for the hot social network of the week. The big internet players have put the brakes on acquisitions. That’s dead end number two.

The people who worked for big internet companies, especially Google, could count on big bonuses and payoffs when stock options mature. They could also count on being wooed by venture capitialists to run companies who need people with some sort of a big interent history. Since many of the early people have left these companies, those people left behind have less professional cache and less financial incentive to depart and invest in a risky venture. Strike three, you’re out.

Moving To A Real Web Economy

It seems to me that all signals point to the need for existing and future internet companies to rely on something other than investment or a big name executive to help create a sustaining business. The name of the game is now revenue. Web companies that have sources of revenue other than advertising will be attractive investments in a world where investment dollars are limited. Likewise revenue generating web companies will be more attractive to the big internet companies who are seeking to add to the bottom line.

A real and sustaining web economy can be created when web services routinely sell something of value to customers who are willing to paying for the products and services delivered. Such an economy requires that investors and entrepreneurs develop a long-term attitude towards web businesses. Those who attempt to flip companies that rely on a free or advertising based business model will often find themselves on the losing end of the proposition, running out of capital with no additional sources of funding available.

Don’t Fight What’s Necessary

Companies are already starting to make the move. Sprout Builder announced this week that they would be charging a fee for their previously free widget creation and delivery services. Tech bloggers began to cry and complain about the change calling the news “sad” and a “tragedy” that threatens the “democratization” of media. To the bellyachers I say this. The current model doesn’t work. If an educational institution or non-profit organization doesn’t have the budget to pay $15 per month then there are larger issues at play.

Sprout Builder is certainly not alone in their desire to get involved in the new web economy. Brian Gardner announced that he would be moving all of his Revolution 2 WordPress themes to a paid model. Many others will follow the lead of Sprout and Revolution 2 in 2009. Those who attempt to sustain the free model will falter.

In order for a true, sustainable web economy to exist people must learn to pay for services and web companies need to get in the habit of creating quality services that people are willing to pay for. If that doesn’t happen then we should all learn to live with an endless stream of mildly useful services that move into and out of existence at an ever quickening pace. That’s not a future that I would like to see.

The Jingle

Might be nice to start the new year with a rant on one of my pet peeves. You may or may not think so but here goes. I’m really done with people using the word “startup” to describe small businesses that are involved in the tech space. Social media is chock full of startups. I think the idea of calling something a startup instead of calling it what it really is, which is a small business or maybe a fledgling venture, is based in some kind of elitist mentality. I also think that it helps to breed a culture that inherently leads many of these ventures to fail.

Setting A Low Bar

The concept of the startup has set a really low bar for businesses. Anyone who throws up a web page feels like they have the right to call themselves a startup and thereby receive adoration as the founder (or even worse, CEO) of a startup. Okay, so you started a website. That’s not a business, that’s a website. Try again please. Take it further. Offer a service that people just might be willing to pay for. The low bar that has been set in the world of the web for what constitutes a real business serves only to marginalize those web based services that are actually transacting business or in the words of a person with common sense, making money.

Spending Too Much Money

Startups are notorious for their free spending ways. Big launch parties and big booths (and sometimes big parties) at trade conferences are standard fare in the world of the startup. It’s time that these small business owners learned about fiscal responsibility. In the mind of the person with common sense you start with a small amount of money and see if you can build and find an customer base for something of value. You then strategically expend capital as you earn revenue. In the startup world you spend money to make an impression so that you can look bigger and more successful than you are. People also spend money to feed their egos. Definitely plenty of those in startup land. Some people want to say, “Hey look, we’re hosting the Frog-haus at such and such show.” Well that worked out well in the end.

Spinning Rather Than Serving

It seems to me that many startups spend a disproportionate amount of their time spinning tales about how great they are (via overpaid PR people, blogs and social networks) and what great things they’re launching. They don’t realize that they exist to provide a service that offers something of value to people. Or maybe they do realize it and just can’t deliver on the solutions that they claim to be offering people. Either way, there’s a lot of talk and very little action. Common sense dictates that you will be much better off if you spend ninety percent of the time building something exceptional and ten percent of the time talking about what you’ve built. Unfortunately in startup land the percentages are typically reversed.

Refusing To Sell A Product

Typical startups hold up a lack of revenue as a badge of honor. The excuse is that they want to focus on traffic growth. That’s just an excuse though. The real reason they’re not selling anything is that they know they’re not offering anything that people are willing to pay for. Hence their startup constitutes a hobby and not a business. I think that there’s also a fear of failure that indicates a lack of confidence in what they’re doing. They’re paralyzed by the prospect of a product that doesn’t sell well enough. After all, they’re so cool right now they don’t want to take the chance of being considered less cool. The ultimate hope is that they will be purchased. This strategy rarely works. Common sense dictates that businesses are started based on something that you sell to a customer. So if no one is paying then you’re not really a business.

B.S. Titles

Every swinging John or Jane who hires a coder and launches a website feels like they have the right to call themselves a CEO. Their best friends become the CMO and some guy who gave them $5k to hire an offshore developer becomes CFO or COO. Allowing people to occupy these titles creates an inflated sense of worth and most definitely quite a bit of ego in web ventures. I don’t know exactly what draws the line between being able to be called a C-level officer or not. I do know that there’s no such thing as a CEO in a business with no revenue. I also know that real C-level officers have built (or inherited) a substantial organization. So the marketing flack of a five person web service can choose to call themselves a CMO but they’re just deluding themselves and insulting everyone they meet by doing so. C-level corporate titles should be properly earned. The idea that you can take a shortcut to knowledge, wisdom and business prowess by granting yourself one of those titles is silly. Real entrepreneurs know that skill and confidence is developed via real experiences (including failures) and accomplishment,not b.s. titles.

Time For A Shift

In 2008 many small companies saw difficult economic times and I’d like to see people doing better in 2009. I would also like to see the quality of services on the web improve. I think that the thing that will help people in the world of startups the most in 2009 is to leave that world behind. In leaving the fantasy world of venti lattes and VCs behind these individuals can join the world of people who are genuine entrepreneurs seeking to build long-term businesses instead of creating something that they can flip in six months to one of the big internet or media companies. It wouldn’t hurt to add a bit of humility to the equation either.

Final Thought

The boom is over folks. It’s time to change for the better and come back to reality.

It looks as though podcast hosting service and directory Podango will soon go the way of the dinosaurs. Early this morning after I read Michael Geoghegan’s post that mentioned a possible failure. Perhaps these two items foretold the impending disaster. They have probably been bleeding capital since the very beginning.

Podango joins an ever growing list of companies failing to build sustainable businesses around podcasting. Audible tried premium DRM infused hosting via their Wordcast service and failed. Yahoo! tried the directory format with Yahoo! Podcasts and failed. PodTech tried to build a network of advertising supported content and failed. Evan Williams of Blogger.com fame failed to gain traction with a free podcast hosting service and directory call Odeo. Podcasting Godfather Adam Curry has struggled to build a sustainable business with the free podcast host and social network formerly known as Podshow.

Damn! Podcasting is a tough business. Not really. Business is a tough business. Podcasting is a technology to some. It’s a genre of media to others. I like to think of the combination of the technology and the genre of media combined as an independent production movement that is changing media. So while individual businesses may fail podcasting as a technology, genre and movement is very very strong.

Please go take a look at the iTunes podcast directory that is home to over 100 thousand podcast channels. In there you’ll find channels from independent producers like me alongside just about every major media outlet and entertainment company. Headover to Google and type in “anything podcast” and see what comes up. More often than not you’re find something that’s right up your alley. So I hate to disappoint the naysayers but podcasting is very strong.

Begin rant. Many of the businesses built around podcasting have failed to gain traction because they failed to understand the market or follow basic fundamentals of business.  I think it’s always a good idea to start small, with little funding and build a business organically. The ventures mentioned in this post all did the opposite. They started with funding and then tried to build a business from there. The “build from the top down” approach practiced by many “start up” type companies, especially ones from Silicon (or Silly Con) Valley is a very risky one. It’s certainly a sexy approach. People get to call themselves CEOs, CFOs and CMOs. They attend the latest conferences and throw big parties. Enjoy it while it lasts because it never does. End rant.

There are many companies that continue to survive while providing services that podcasters will want to utilize to publish or enhance their shows.

• Blip.tv is a high quality video hosting site that has supported iTunes feeds and podcast downloads since their early days. Blip relies on a combination of “pro” account fees and advertising revenue to pay the bills.
• Blubrry (run by RawVoice) is a podcast directory/hosting site that also offers media statistics. They generate revenue via hosting and premium statistics products as well as advertising arrangements.
• Podbean is a podcast directory that also offers publishing and hosting of media. Podbean generates revenue from paid hosting services.
• Libsyn is a podcast publishing and hosting service that has been around since the early days of podcasting. Libsyn generates revenue from paid

The common denominator of all the services mentioned above is that they offer paid services that add value to the podcasting (or media publishing if you like) experience. They may not all survive but for now they have outlasted much bigger players in the space. Perhaps they’re also creative with their budgeting, spending like a small business instead of a Fortune 500 company. Meanwhile the common denominator of the companies that have struggled seems to be insisting on having advertising as the main (and sometimes sole) source of revenue.

Earlier this year I offered some advice to podcasting companies. Take a look at it (particularly item #4) and see if it doesn’t make sense today.

In Michael’s post he asks a very imporant question. Who’s next? I think that anyone who relies on a solely advertising based revenue model could be next. Especially those companies that offer free media hosting and attempt to recover the cost (and maybe make a profit?) via ad revenue. Mevio (formerly PodShow), TalkShoe and BlogTalkRadio come to mind as companies in the space who fit that profile. I hope they all can find a way to succeed but I think it’s likely that one or more of these companies will fail in 2009.

Lots of buzz happening this week with both Facebook Connect and Google Friend Connect going live. Lots of bloggers have been writing about these launches and looking at it as if this is merely a battle between Facebook and Google.  There’s definitely an element of Facebook vs. Google happening but there are many other smaller players involved in this tussle as well.

From where I’m sitting I see a larger battle between services that need to get their functionality onto blogs in order to either survive or at least continue growing their user base at a very healthy rate. Facebook and Google obviously fall into the latter category. Many other smaller “identity” type services have been available to web publishers long before Google and Facebook lumbered onto the scene with their offerings this week.

A Slew Of Players

Services like Disqus, Intense Debate and CoComment want to help web publishers enhance site conversations and build community via enhanced commenting features that include the ability for users to create profiles. Seesmic provides enhancements to comments by allowing video discussions. Gravatar offers simpler functionality by providing a traveling profile picture (also known as an avatar) that pops up on sites that have their plugin installed.

MyBlogLog has been on the scene for awhile as well. You’ve probably seen their sidebar widget (pictured at left below) on a few blogs. The widget allows site publishers to create something of a community by allowing visitors to “join” sites and have a discoverable profile and avatar. Yahoo! purchased MyBlogLog for $10 million almost two years ago. So Yahoo is in the game too.

Coincidentally (or likely not) the new Google Friend Connect features a “member” widget (pictured at right below) that looks very similar to the MyBlogLog widget. Wait a minute. Maybe it’s really Google vs. Yahoo. The again you can sign in to the Friend Connect service with a Yahoo ID so they seem to be playing nice with one another.

Given Google’s recent cozying up to Yahoo it seems to be Facebook against everyone else. But Microsoft has an investment in Facebook of a couple of hundred million dollars. So perhaps this is really Google/Yahoo vs. Facebook/Microsoft. But what are they all fighting for? They’re fighting for users.

The End Game

The players in this game know that they will have a much easier time capturing large numbers of users if they can get publishers to buy into their identity (or profile) based services instead of adopting the identity services offered by their competitors. Both Facebook and Google want their services to be the center of a user’s world so that user will continue to bring their friends, family and website visitors into the fold.

There’s still a strong Google vs. Facebook element to this whole scenario. Facebook started out as a social network that now wants its users to utilize their service as a primary means of communication. Google started out as an email service that now wants users to utilize their service like a social network. So we have to services moving in opposite directions and colliding in the middle. But don’t forget Yahoo, Microsoft and MySpace either.

What about the small players I mentioned earlier? I recently heard someone say something like, “When elephants fight the grass gets trampled.” Most of the small players that want to find their way onto publisher websites will get trampled. Maybe one or two will get acquired by the large players.

What’s The Difference?

Facebook Connect and Google Friend Connect seem to have the same goal of providing an identity service to publishers but are quite different in how they go about it. Google allows publishers to embed a series of widgets (Google calls them gadgets) that can be embedded into a website. Google’s member widgets currently offer basic membership and profile functionality to sites. Google Friend Connect also has a widget for ratings and a widget for comments.

Facebook Connect (pictured at left) integrates with the existing comment system of a site so that people can comment with their Facebook identity and also share their comments on their Facebook news feed. So while Google tries to add features plus identity Facebook really just adds identity.

Both services offer sharing options, Facebook via their newsfeed sharing and Google via an “invite” link on their members widget. Come to think of it, Google’s service also takes a whack at universal sharing services such as Add This and Share This too. JS-Kit should keep their eye on Google as well.

Friend Connect In Action

Friend Connect piqued my curiosity so I recorded a video screencast earlier today showing how to implement the members widget on a WordPress blog. You can see the full size version at the Awakened Voice Learning Center.

What Do Users Do?

Publishers will have to make a decision about the tools that they decide to integrate with their sites. Some will take an all (or most) of the above approach and cram the different services into their sites. There are some risks to that approach though. Use of multiple identity services can confuse and possibly drive away new users. And too many widgets on a site are risky in terms of the performance impact. If one of the services get slow (or goes down) it is likely to affect every publisher unless the widgets somehow degrade gracefully.

Some publishers are likely to draw a line and pick a favorite service and run with it. If they choose the wrong side those publishers could miss an opportunity to gain the users of the more popular service. Some publishers will keep doing what they’ve been doing which isn’t necessarily a bad thing.

Everyone else needs to decide whether or not they buy in to the profile services offered by these many vendors. I happen to have a Gravatar, a Google Profile and a Facebook profile. I don’t know how much I will use my Google profile or Facebook profile when I interact with the sites that support their respective services. I’ll write more about it later to let you know how I think it’s all turning out.

A couple of weeks ago a good friend of mine asked me the question, “What’s going on with podcasting?” My reply was something like, “How the hell do I know?” He was a bit surprised because he knows that I’ve been deep into the podcasting game since early in 2005. Truth be told I still keep an eye on things in the space but i’m not the oracle of podcasting information that I once was.

I decided that my friend’s question was worth answering but didn’t give myself any time frame for looking around and posting. I’ve got lots of other stuff going on including helping my wife out with our second child and my first semester of graduate school which has taken more of my leisure time than I expected it would. In any case I was doing some research and saw a tidbit today that really got my Irish (well Italian actually) up.

I cruised over to the Blogger and Podcaster Magazine website to see if they were still alive and I was greeted with the following banner image.

My first reaction was something akin to, “Oh jeez, what’s this?” It’s unfortunate that I become accustomed to dealing with snake oil salesmen when it comes to new media but sorry there are a lot of them out there. Here I see a graphic that in a couple of thousand pixels promises full-time income, health care and company stock. It looked fishy to me so I delved in further to see what the deal is.

Blogger & Podcaster have teamed up with three (or maybe two) other social media type websites to offer what I mentioned above plus promotion plus “discounts and freebies.” I look at the companies involved and not one strikes me as very successful at what they are doing. Podcast Pickle has been around a long time as a directory and forum but has not seen any appreciable growth. Fuel My Blog pitches itself as a “spam free community exclusive to bloggers.” I had never heard of it myself by their blog has 333 Feedburner readers so who am I to judge?

Then there’s Social Rank. I hope you have better luck with their site link than I did because it went to an error page for me. I tried the Social Rank blog too. No luck there either since the blog has been deleted. That could be a problem since the Social Rank “search engine” is supposed to help serve up promotion “to millions each month.” That’s not the worst of it. Judging by the Google Trends numbers at left this band of merry bloggers and podcasters can’t even draw tens of thousands of people each month to their sites. Perhaps they should ask Podcast Alley, which has more traffic than the other sites but is not part of the team.

The thing begins to smell more fishy that the old Fulton Fish Market at 4AM. I decided to Google the B&P Media Network’s “BPMN’s First Member - Self-Made Billionaire Bill Bartmann.” According to Fortune Magazine Bill Bartmann was a billionaire on paper, which means he wasn’t a billionaire. He’s really a guy who’s a good salesman that seems to excel at building paper assets and then losing them all.  Now he’s a motivational speaker type looking to piece a career back together.

Evidently Bill is going to lead the new media revolution and help all of us little bloggers and podcasters rise up to earn a six-figure income, have health care and even a shot at being a billionaire ourselves. In fact BPMN’s pitch for their venture promises to solve all of the problems for the little guys and gals in new media. They’ll help you build an audience. They’ll help you make money. They’ll help you get health care. They’ll get you equity. They’ll get you access to mainstream media. The list of promises goes on and on.

I’ve said it to people in the podcasting and new media space many times before and I’ll say it again. Stay the heck away from things like this. Joining “networks” does nothing for you. The multi-level-marketing hucksters are simply making another run at the new media space. They want you to go to work for them, bring them your audience and help their failing websites and publications to survive. They’re not going to get you health care, they’re not going to make you rich via stock in a company worth nothing. You can do those things for yourself. Whether or not you can do it with blogging and podcasting remains to be seen.

What these folks will do is distract you from building something by yourself and for yourself. I’ve seen all the promises before. Remember Quit Your Day Job from Podshow? Life and business does not work the way these people say it does. You work hard for yourself. You take the time to learn. You try to do better. It’s hard. Nothing’s guaranteed. These people trying to sell “success” as a secret system with a code just waiting to be cracked are full of it. And that’s that.

Earlier this year I posted about flash players worth checking out for including streaming media on your website. On of the players I mentioned was the JW FLV Media Player which I happen to use extensively myself. In the interim months since that post there have been several updates to the JW player that are worth noting, especially for those who publish video on the net and want a flexible, configurable video player that can also reflect the brand of a show.

Support For H.264 Video

This is a big deal because it means the player now supports streaming iPod and iPhone compatible videos that have the .M4V file extension. So video podcasters can use the player to link directly to their source file and deliver the same video quality via the web that they do when the file is downloaded.

Support For YouTube Videos

The player can now play YouTube videos and also playlists using the YouTube API.

Support For WMV Video and WMA Audio

The JW WMV Media Player is a separate player that leverages Silverlight technology from Microsoft. I know that WMV is rarely the format of choice for online video publishing but there may be some situations where the Windows format is necessary. In that case check the WMV version of the player out.

Plugins and Themes

This is a big deal. Jeroen’s company LongTail Video has created an AddOn gallery that contains a variety of player themes and add-on functionality. I haven’t done anything with the themes (or skins) yet but I have checked out some of the plugins and they are very useful including Viral, Rate It, Tip Jar and Google Analytics.

Some of the features enabled by the plugins (like Viral) are available if you use a third party video hosting service like YouTube or Blip.tv but some (like Tip Jar) aren’t. And the JW player has the added benefit of being a non-branded “white label” solution. In fact the JW Player makes it pretty easy to stamp your own brand on the player including adding logos and changing the player colors. See the JW Configuration Wizard for some examples.

Since anyone can build add-ons for the player I think it’s very likely that we’ll see the list of choices expand, making the JW FLV Media Player and even more valuable resource to web video producers as time goes on.

CMS Integration

In addition to the plugins and themes LongTail Video is offering up a list of “modules” that provide integration with various Content Management Systems including Wordpress, Drupal and Joomla. These modules are worth checking out if you plan to build a white label video site on one of these platforms.

Player Example

To give you an idea of how the player looks if you don’t know already I’ve embedded one of my videos from another site. This particular player is using H.264 streaming, the Viral plugin along with a custom background image. You’ll also notice that I’ve taken advantage of a flash variable that adds a link icon on the player that links back to the original video site.

Everyone needs to grow up some time. And it’s high time that some web companies grow up and begin to embrace the fundamentals of business. If they don’t they will be gone. Their many URLs will find their way to the junkyard along with the thousands that visited the old 404 in the sky after the first dot-com (or was that dot-bomb?) bust.

The first step to getting help is to admit that a problem exists. Listen to CEOs and venture capitalists today and you’ll hear the same stubborn tones that you heard in the pre-collapse days of web 1.0 busts like WebVan and Kozmo.com. 

Fred Wilson dishes spin about Twitter, ““It’s like the stupidest question in the world: How’s Twitter going to make money?,” said Union Square Ventures’ Fred Wilson, another investor. “It’s like ‘How was Google going to make money?’” Comparing Twitter to Google, even early days Google, may be the stupidest statement in the world.

Jason Calacanis professes on his mailing list, “”We can now operate past 2012 even if we never make any advertising revenue, and truth be told, building advertising-based companies is my specialty…” All of a sudden past performance is a guarantee of future results?

The CEO of Break.com walks the tightrope when he tells CNET, “”Essentially, we are profitable…” after announcing layoffs. Not to web company CEOs everywhere. There’s no “essentially” in the profitable equation. You either generate more revenue than you spend or you don’t.

It’s time for a reality check folks. Web businesses need to find other ways to earn revenue besides advertising, loans and venture capital. Over the past several years many companies heralded their traffic as evidence of success. Traffic to a site may be worth something to advertisers but as times get tougher display ads are worth less and less every day. These days advertisers will value converted customers much higher than they will clicks from a particular site. So in order for a web business to have a successful advertising based business model they need to have tons of traffic and very low overhead. Rarely do revenue poor web startups meet both of those criteria.

I don’t know that the established web properties who’ve already spent millions in venture capital money can be saved. People at these companies get accustomed to having plenty of money available and when they start cutting staff and other budget items those who are left end up pretty demoralized. That demoralization usually ends up affecting the business in a way that dooms prospects for the future.

A new generation of web startups needs to embrace the following fundamentals if they want to have a chance at success during any market conditions.

• Start very small. Most web based business ideas can benefit from a pilot period where the business is rolled out quietly and with limited features. Such an approach provides runway for a company to assess the reaction of the marketplace and make adjustments before building a much larger product.
• Spend very little money to start. There’s an inverse relationship between the amount of capital available and the amount of creativity in just about any business. If you start with $5,000 or less you will challenge yourself to find creative solutions that you would otherwise pay big money to discover. 
• Grow the business organically. Start by reaching out to friends and family. Then reach out to personal contacts that you’ve made online. Use blogs, podcasts, social networks, Flickr and YouTube to build a legion of loyal followers. Your other option is to pay a public relations company to help get you attention in the press and the mainstream blogosphere. The fact is that if your idea is a good one that’s well executed you can probably get the same kind of attention doing it for yourself.
• Give the business time to grow. Patience is a virtue even in web startups. If you don’t have patience then perhaps you should join a company that’s already doing well. Of course, the rewards will be much less gratifying and you’ll have less control over your own destiny.
• Have something to sell on day one. I’m all for free versions of a service. Giving away free samples is a technique as old as the idea of selling. Your business will be much more attractive to potential investors if you have something you can charge money for. Your ability to sell whatever that something is will tell you much about either the value of the product or your selling abilities. 
• Profit is a good thing. A million web companies have tried the approach of taking a loss on every sale while trying to make it up via volume. Hint: When you take a loss on every sale a larger volume of sales pushes the company closer to extinction.

I’ve been using the Google Chrome web browser as my primary browser at home since shortly after it was released. I had previously been using Firefox as my primary browser but I wanted to see what the new browser from Google had to offer.

Having given it a bit of time I wanted to list some pros and cons for the benefit of others who may have considered making the switch.

Pros

• Quick performance with a very clean interface
• Nice thumbnail view of frequently visited sites when opening a tab
• Intelligent address bar that can find parts of a web address just by typing in a word
• Fast Google search within address bar
• A crash within a tab doesn’t crash the browser

Cons

• No RSS autodiscovery
• No add-ons to extend functionality
• Display of some website elements not consistent with what I’ve seen in Firefox
• Doesn’t integrate with Google Bookmarks 

Chrome vs. Firefox

Firefox is still the much better browser. The rich suite of Firefox add-ons is what makes the difference.I’ve become so accustomed to the add-ons in Firefox that I feel web disabled when working in a browser that doesn’t have similar functionality. It’s also very surprising that Chrome does not allow you to utilize Google Bookmarks as the bookmarking manager out of the box. Firefox does allow this via the GMarks add-on.

I like the address bar in Google Chrome but there’s also very similar functionality in Firefox via the Smart Location (or “Awesome”) bar. After making the comparison I think that the Chrome’s biggest advantage lies in the fact that each tab is isolated from the entire application which means that the crash of a single tab doesn’t crash all of the tabs.

Making Chrome Better

I don’t know if Google is going to try and open up the development of Chrome to allow developer add-ons ala Firefox. I think that would help to improve the overall utility of the browser. Would developers show up? One thing that Google can do is to improve integration with Google products like Gmail, Bookmarks, Reader and Talk. These products have an ever expanding user base and many people would likely be pleased with a browser that offers a “one stop shop” for using the most popular Google services.

It’s never easy to end a relationship that lasts almost nine years but sometimes the move is a necessary one. I joined Netflix back in December 1999 when the service was still very young. I spent a lot of time traveling then and my newest laptop had a DVD player built into it.  I was watching lots of movies as I flew all over North America to visit my clients in the energy industry.

I really loved the convenience and flexibility that Netflix afforded, which was a stark contrast to other movie rental options at the time. I paid my flat monthly fee and could return movies when I liked. I didn’t want to deal with going to a video store either. It was a perfect match…for awhile.

Times change and so do people’s habits. The first major change for me came when daughter #1 arrived in June of 2005. Since then I’ve spent less time watching the DVDs I rented from Netflix. I found myself holding movies for weeks at a time. Sometimes I would return a movie without ever watching it. Still, I kept paying the $18 a month for my account.

My second daughter arrived in June of this year just before we were planning to move. I decided to take stock of everything including our family budget. I looked at Netflix and decided that $18 a month isn’t much but when combined with some other non-necessities cancelling Netflix could help push my new budget savings to over $200 a month. So I said goodbye to Netflix and cancelled my account.

Thankfully the process of cancelling my Netflix account was a simple one. No AOL style BS. You can cancel online with the requirement that you return all the movies you have out right away.

My original plan for watching DVD movie releases at home relied on the digital versions via Time Warner Cable. Standard definition new releases rent for $2.99 for a 24 hour period and high definition new releases go for $4.99. I hadn’t purchased any digital rentals when I was told of Redbox.

I mentioned my digital rental plan to a co-worker who immediately suggested Redbox. Redbox places DVD rental machines at strategic locations like McDonalds or at supermarkets. I did a local search on the Redbox website and found nine boxes located within five miles of my house. The closest box is half a mile away.

I’ve made two rentals so far and here’s what I like about the service.

• No membership fees. You only pay for what you rent.
• Movies are reserved online.
• Movies have to be picked up at the box where they are available but can be returned to another box if it’s more convenient.
• Rentals are $1 per night and I have until 9PM the next day to return a movie I rented today.
• Receipts for movie reservations are emailed as well as confirmations that the disc was returned.
• Many of the boxes are outside so pickups and returns can happen almost anytime.

As you can see there are a lot of positives. There are a few negatives. If you forget to return a DVD you get charged $1 per day until you return it with charges capped at $25. At least they let you keep the movie if that happens. Selection is limited to the most popular films. And if a film is in the Redbox catalog you may have to get it at a location that is further away from the one you usually go to.

There are a couple of interesting things about the Redbox business model and how I found the service. Their model relies on a unique hybrid approach that leverages the web but also provides a point of purchase. You give up a little bit of the convenience and selection of Netflix in return for a low-cost pay as you go business model.

The other interesting point is that I didn’t hear anything about Redbox on the web prior to joining. I had seen the boxes before but rarely gave them a second look. This was a true word of mouth find. It’s an instructive point for social media startups who put all their eggs in one basket trying to gain the favor of leading tech bloggers. There’s people out there folks. Try to connect with them directly!

I can’t say that Redbox will ever be as large and successful as Netflix. The current traffic for Redbox.com is modest but growing nicely. What I do know is that people’s lifestyles and priorities change. Perhaps Netflix and other web based services can learn from that fact and start appealing to customer 2.0 instead of web 2.0.