Mixergy, Albert Lai Come Outta The Closet

Mixergy, Albert Lai, (Serial Entrepreneur) Founder of BubbleShare, IdleAgent, BuyBuddy

What to expect this episode:

• Albert coming to you from his closet, does this sound crazy, sure does, watch and find out why.
• Product Promotion Techniques
• Relationship Building
• Credibility Building
• Acquisition Advice

What Andrew calls one of his most different and interesting interviews.

Kontagent is the leading viral analytics platform for social network application developers. The Kontagent platform has been built from the ground up to provide deep social data visualization and analysis that delivers actionable insights delivered via a hosted, on-demand service.

The Kontagent platform works directly with the Facebook API, and will soon support OpenSocial and the MySpace platform. Kontagent was founded in 2007 by serial entrepreneurs Albert Lai/CEO (5th startup, most recently founder/CEO of BubbleShare) and Jeffrey Tseng/CTO (2nd startup, most recently founder of Aevena) . The company is headquartered in the SOMA district of San Francisco, California with a presence in downtown Toronto, Ontario.

Startup chronology: CD Rom Yearbook, FrogDog, Hardware Central, MyDeskTop, BuyBuddy, Idleagent, BubbleShare

Albert admits this is the first time he has spoken about some of these early lessons in a long time.

First Business

How old were you when you started your first company? 15 years old a multimedia production company called FrogDog, which created a promotional game that was distributed virally via floppy disk.

Did you come up with the idea and then go to MuchMusic of Canada? No, it was inspired by a High School yearbook project (1994) they created on CD Rom, they believe it is the first yearbook in the world created on CD. This project led to a lot of press and corporate customers approached them looking for something similar (The Black Swan).

How do you make something viral on a floppy disk? This was 95-96′ the idea was they would send them out free and friends could copy it and give to friends.

Promotion and Relationship Building

How did you get the press? Being young (15-16 years old) landed them on the front page of the largest newspaper in Canada, he learned at a young age to make the media your friend. Especially, if you’re the underdog. (I wonder if it was MuchMusic leaking the deal to the press to get more press)

How do you build relationships with the media? Find out who might be interested in your product and try add value to their life. Have a continual dialogue with journalists your space, so that you aren’t just there asking them for favors.

What gave you credibility as a teenager? It wasn’t just building companies, it was creating the entire professional product of a businessman. (Business cards, marketing package, incorporating for billing purposes) Now a days, it’s like having a professional website. He has many students that he mentors that by looking at their website you would never know they were young students.

Who did you target as your first customers? We looked for the biggest businesses, fortune 500 companies, looked for referral through mentors. To build up credibility they lowered the price to build relationships, they do this still today. They become reference able partners. They took the approach of focusing on big companies and then filtering down to smaller ones. Andrew gives an example of Tom Szachy, (TerraCycle)that tried the opposite and it was grueling work but when he tried the opposite approach it led to success.

Which relationship led to your reference able businesses? MUCH Music of Canada. He recommends going to events (conferences) that your customers are like to be at and to build relationships with the conference organizers so that you are present and providing value for the event.

Andrew adds that if you can become a participant and be on a panel, one you get in for free and two it adds to your credibility and promotes you in a way that an attendee never will.

Doesn’t it undo all that when you meet them in person, when you were young? Back then there weren’t as many young .com millionaires but even then people realized youth and technology fit well. Today it is not a question.

Is the first product you created for MuchMusic? Yes, it was similar to the early Myst. Creative constraints were a big balancing act. So they chose to go retro and make it look like you were watching a black and white TV, thus helping out there disc space issues. He comments that today those restraints may not be there but he is doing the interview from a closet he has different constraints.

He comments that you never want to get too much space they have made that mistake before. Constraints lead to more interesting ways startups operate. Albert comments that when funding was a constraint those companies (BubbleShare, MyDeskTop) did better than the better funded businesses.

Albert adds many great businesses they come from hobbies.

Second Business

How did you promote MyDeskTop? It was a different world back then their wasn’t as much interesting content but they worked in niches that people were passionate about but highly monetize able, meaning that they helped bring enthusiasts and manufactures together. Were you buying ads, using IRC? The used many avenues, getting linked on Slashdot was very important.

At the time what were some of the ways to get on Slashdot? They had a TopGear approach, they would do stunt like stuff with their hardware, such as over clocking hardware they first site to publish a benchmark to breaking the GHz barrier. They would do crazy stuff and cross promote to other sites.

How did you get people to work for you for free and do these crazy stunts? The love of writing combined with a love of hardware, most people wanted an avenue to publish their work. People forget back in the day blogs weren’t as accessible so getting published was tough.

The first people who jump into a technology have it easier than followers.

They sold MyDeskTop, in the single digit millions they are under an NDA. Payment was in cash he advocates balancing your portfolio of stock payments vs. cash. Also when starting a business he feels the business is high speculative and invests in conservative stocks.

Third Business

Buy Buddy, they were overly optimistic about wireless technology adoption curve.

Learned that you cannot fight two things:

1. don’t try change people, most are lazy but they want their data to be secure (even if encrypted).
2. don’t fight technology curves if it is against the grain of rapidly reducing hardware costs.

Fourth and Fifth Business

The failure of IdleAgent led to BubbleShare.

In 2000 Albert started doing more business out of Silicon Valley, it was a major down period for tech. He felt that every advance in technology they were making they were being held back by the market. When you are in a down economy you don’t want to build a capital intensive product.

What was the vision for BubbleShare? It started off as a network of instant messaging clients but went through many iterations and ended up in a photo sharing site. They realized what they wanted to do was very complicated and simplified their goals. They focused on solving one problem. They used inspiration from their two favorite websites Google and Craigslist (a simple interface and because you didn’t have to register). Simplicity was BubbleShares beauty, they were more concerned about appearance and elegance and what they failed to do was produce a social aspect.

They have learned their lessons about being viral and being data driven they are now focusing on viral analytics, the equivalent of taking Google Analytics and applying it to social networks.

Albert adds sometimes it pays not to listen to their customers and should give thought to business goals and strategy of distribution goals.

You want to be very careful in acquisition discussions, sometimes they are really researchers that may really want to build their own product. Fortunately, they had learned that lesson early on. Try feel out the market and try get multiple parties interested in case one falls through another can step in.

Steve Wozniak, Co-Founder of Apple is constantly experimenting with equipment do you think you are a tinker of businesses? I think am interested in trying to solve problems, which leads to many ideas. He has improved in being strategic thinker and applying it to his hobbies/passions.

• Feedback, how can Andrew improve his product? He wants active participants
• Here is Albert’s Website – Kontagent
• Please click around and explore Mixergy (you will be amazed at what it hidden on older pages)

Questions I would have liked to have heard:

1. Did you go to college? And if so, did it interfere with you starting companies?
2. Did he take time off after selling MyDeskTop or did you have a project waiting in the wings?
3. How did you find your co-founders?

TWiST 14 Review, Mike Arrington, Stop Trying To Be Funny

This Week in Startups was brought to you live at Sequoia Capital with a bit of an understandably different format. The big X factor in this show is the presence of Mike Arrington of TechCrunch fame. While watching live, I was a Mike Arrington hater, he disrupted the flow and Jason seemed a little off quilter. I was even thinking of good post titles all revolving around Mr. Arrington, “Leo was right, SCREW YOU ARRINGTON”, “Mike “No Respect” Arrington” came to mind. I even thought of creating a disruption counter as a nice little visual (for those of you interested 7 in 24 minutes, 1 every 3.4 minutes). However, when not trying to be funny he had some good input. I am particularly happy he brought up CrunchBase, I had overlooked the link at the top of TechCrunch and it has some great information.

The beauty of this interview, while not structure well (it jumps around a bit), Garry is new to the startup business and still learning, so I feel we get a first look into the mind of a new entrepreneur. However, I was hoping to hear these questions asked in the interview:

• How did you get introduced or get the attention of YCombinator?
• Follow up on business model? Garry never answered the monetization question

When editing be consistent show urls, so it is easier for viewers to find (audiblepodcast.com/twist, Ustream, webspy, dnamail, guest site), Jason never seems to remember the Audible url and If it is viewed I think it is easier for viewers to remember. You may want to ask Audible for a url for people that already have an account to show them you are spreading the word (maybe a one month half price promo)

Jason suggests that Garry try his idea (iPhone contest) for Posterous’s next 5 features. Nothing on Posterous Blog yet, we’ll see if he takes his advice.

Tyler’s news delivery is not so good, better stick to insights. I recommended trying Tyler in the news chair in my last review (which fit the segment) but be careful not to exclude your guest in conversation.

One last point, this show was much shorter, just a little over an hour which is understandable.  I am sure Jason’s schedule is filled with TechCrunch50 meetings. However, the one thing I think we learned is 1:01 is too short and 2:25 is too long. I do look forward to next week’s format of Ask Jason and Jason’s Shark Tank, just an FYI each question is taking about 10 -12 minutes and a little longer for Shark tank pitches.

Show Ratings:

Mike Arrington:

Garry Tan:

Tyler:

Jason:

Overall Show:

TWiST, Garry Tan of Posterous

Episode 14

Date: Sept. 4, 2009

Live at Sequoia Capital, including Mike Arrington

Guest: Garry Tan, Co-founder of Posterous

Posterous is the dead simple way to put anything online using email. We launched in July 2008 and we’ve been steadily growing and adding features.

We love sharing thoughts, photos, audio, and files with our friends and family, but we didn’t like how hard it was… so we made a better way.

That’s posterous. We’re super excited to see what happens when blogging becomes as easy as email, and we hope you enjoy posterous as much as we do. Thanks for trying it.

Interview: (03 min)

• Where did the idea come from? Email is the simplest way we all communicate why not just email something and have it integrated into many services.
• To start an account it is very easy just email a picture to post@posterous.com
• Jason and Mike use the service but the beauty is someone who doesn’t know how to blog can get started right away
• How much money have you raised? $15,000 originally from Y Combinator
• What are the terms and why did you choose Ycombinator? They got about 6% of the company for about $15,000. It wasn’t about the money it was more about connections, they have weekly dinners (about 20 to 25 startups per session) and it has that fraternity feel, a Band of Brothers.
• They raised $725,000 Angel round (pre-series A, convertible round with a Cap.) they have used less than half, they want to stay lean (4 people: 3 fulltime and 1 contractor) only a month ago they got an official office.
• Been in operation for 14 months, experiencing 25% growth monthly
• A feature Jason wants to see is default settings for different formats ie. pictures go to Flickr, Posts go to his blog. Garry comments that it is more than likely going to happen.
• Who do you call when you need advice? Our lead investors
• Garry admires and respect? Jeff Bezos of Amazon, he is doing great with whatever he touches. Jason agrees he is the most underrated CEO and does great stuff.
• How do you make money? Never answered
• What did you do before Posterous? Product Manager for Microsoft (02-03) he thought the internet was dead, he learned what to do and not, basically do less. He learned it was difficult to get a feature in a product and then just as difficult to take it out. Cannot move quickly as a company.
• Garry is a big believer in less is more, people try to add too many features, do less.
• What are the challenges? What is the hardest thing? “Cutting to the bone” with resources
• What is next? Keep growing, full template themes.
• What do the other users (Flickr, Twitter, Facebook, etc.) think about Posterous? No pushback yet, they built it because people wanted it.

The News: (40 min.) with Tyler Crowley

• Facebook mobile connecting 65 mil. people on mobile phone app, stunning but not surprising, people use FB like their inbox in a way competing with Gmail.
• Former CEO and Co-founder of FeedBurner, is now the COO at Twitter. What does this say? Dick Costello is the next CEO, succession plan, they get to see how they work together for when the company goes public.
• Ebay signs agreement to sell majority stake in Skype for $2.3 bil., founders are suing, Skype is an amazing product, Jason’s question, why haven’t they been able to grow the company?

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