eBay jumped on the App Exchange bandwagon with an announcement from their development conference this weekend of a bunch of new APIs and development tools. This was a pretty broad announcement – Shoping.com, ProStores and even PayPal (who had traditionally been relatively closed) are participating in the effort – and expands their existing developer efforts significantly (see their developer site for more information). API’s are certainly nothing new – they are common ways for companies to allow access to their systems – but it seems to me that application exchanges are the new ‘it’ thing to do for platform companies (Salesforce.com, Google, eBay, etc.). This is a pretty new concept – companies in the past were extremely protective of their platforms and wanted to control almost every aspect of access to their systems (in this paradigm “open system” often meant ‘we’ll let you use our proprietary scripting engine to ‘develop’ to our platform). Companies have loosened this view in more years and moved to more open API’s (sometimes through a developer program; more recently completely open to anyone who wants to access them). The AppExchange idea is the next logical extension of this (the “Web 2.0 model for development”, if you will) and makes perfect sense: open your system, give support and help to those that want to develop extensions to it and give them a single home where users of your software can find these extensions. Its free development work, makes your platform that much more powerful and provides a nice sourcing ground for potential acquisitions.

Now we’ll just have to wait and see if the more embedded platform players swallow their pride enough to do the same. Are you listening Oracle?

In one of my first posts (The Adventure Reference) I talked about what amounts to pattern recognition – the ability to interpret information and draw conclusions based on experience with similar sets of circumstances.

I was thinking about how difficult this can be the other day and, importantly, how easy for groups (i.e., boards) to sometimes lean towards a similar interpretations of events. This reminded me of a classic experiment in psychology that very clearly illustrates this point. In 1962 psychologists Schachter and Singer 1962 performed an experiment that dealt with what they called the two factor theory of emotion. Basically they were trying to show that people’s interpretation of an emotive state can be easily influenced by environmental factors (in their case another person). In their experiment they injected college students with epinephrine, which is a drug that acts like adrenaline and causes a state of emotional arousal. The students were, of course, told the injection was something else and then placed in a room with someone they thought was also in the study to ‘let the shot take effect’. In actuality their room-mate was working for the experimenters and took on one of several emotional states (anger, excitement, etc). It turns out that the subjects were highly susceptible to taking on the emotional state of the room-mate. They were interpreting their emotional arousal as anger if the room-mate was angry, excitement if the room-mate was excited and so on.

Now, I’m not suggesting that boards are on drugs (or that they should be!), but this experiment illustrates the point that humans are very good at making errors or attribution (somewhat along the same lines as the finger tapping experiment I talked about in my post on communication effectively where people overestimated the extent to which they were conveying useful information).  Something to think about when you are weighing decisions . . . especially in a group.

From CES. The bit with Bono is particularly amusing!

Enjoy!

http://www.youtube.com/watch?v=Xr5w3X4R8b4

Ross and Dave sent this link over to me today.

Parody –  a strong sign of flattery.  Clearly Apple has marketing down – we could all take a lesson. . .

https://www.gizmodo.com/gadgets/images/iProduct.gif

I have no idea why Fraser, CO (our adopted 2nd home) would want the tag-line "the icebox of the nation" given its focus on outdoor activity (its next to Winter Park, has a great fishing stream running through town and has miles and miles of back-country skiing, hiking and cycling trails).  But apparently that is indeed the case.  Fraser has been involved in  long legal battle with the city of International Falls, MN for rights to the coldest place in the US.  Yesterday, International Falls won out (it really is colder there!).

INTERNATIONAL FALLS, Minn. – International Falls is officially the "Icebox of the Nation."

The city on the Canadian border had been fighting the ski town of Fraser, Colo., for the legal right to the trademark. International Falls claimed victory when the U.S. Patent and Trademark Office sent the city attorney a certificate granting the community Reg. No. 3,375,139.

Here’s the full article: http://www.msnbc.msn.com/id/23096109/

I’ve sat through a few presentations by investment bankers recently on what it takes to go public (most recently at VC in the Rockies – see my post about the conference here).  I  thought I’d throw out some of my notes so you could see what I’m being told it takes to get public in the current market.  The VCIR panel I sat through included some thoughts on the state of the m&a market, so I’ll include those notes as well. Company ‘Requirements’: – Revenue: ‘Bigger the better’; minimum of $60m/year annualized (so $15m/quarter at the time of the IPO; however 60% of 04’ IPO’s were < $100m in revenue (up from only 30% in the depths of the market); this has been a very consistent metric across all of the bankers I’ve talked with. – Profitability: Companies should be at or near profitability prior to IPO; there was some debate across the people I talked with about whether this was a requirement – some people thought companies absolutely needed to be profitable, others gave a little bit (but not much) of wiggle room. – Funding Needs: Company needs to be fully funded – the money raised in the IPO should be expansion capital, not core operating (get to profitability) capital- Team/Execution: Company probably needs to have been around for 4+ years; management teams are coming under much closer scrutiny by investors (was not the case in the bubble)

M&A Trends: – Cash deals are at an almost all-time high (presumably driven by both low interest rates and acquiring companies belief that their stock was undervalued and therefore equity was too expensive; in addition, a lot of active acquirers in the tech space especially have large cash reserves) – Hostile deals are also at an all-time high (drive by cash availability as well as companies feeling that some targets are ripe for the picking with their depressed stock prices) – The IPO alternative is seen as a credible threat (the banker who presented at VCIR estimated that 2/3rds of m&a deals are now dual tracked – this number struck me as high, but even if the real number is ½ of that it’s still an impressive figure).

The overall feeling I get is that the IPO market is certainly available to quality companies, but that the scrutiny companies go through to get out is real. While the markets basically shut down for the sectors that I work in during 01’ and 02’ they’ve clearly come back since then (as have the m&a markets, which is the more likely exit for many of the companies that I work with). We’ll have to see what 2005 brings – 2004 saw 54 IPOs of tech companies – lets hope we’re on track to best that figure.

UPDATE TO ORIGINAL POST ThinkEquity Partners has sarted a blog – an excellent development for those of us who are excited about the potential of corporate blogging – and just posted their thoughts on the IPO market this year.  You can check it out at: http://www.thinkequity.com/mt-archive/2005/02/ipo_dashboard_f.html

I thought I should post this after making such a stink about data being plural and all.  Here’s a link to a little word test for those of you (like me) who are interested in seeing if you really have a clue about these things (turns out I have only a partial clue – I scored 93% on each of the beginner and intermediate, 100% on advanced and a paltry 66% on expert).

You can take the test here (the direct url in case the link doesn’t work is http://www.okcupid.com/tests/take?testid=14457200288064322170).

Thanks to Dave Jilk for sending this over to me.

Let me know how smart you are . . .

The New York Times is running a series of articles on the last days of the Enron crisis (actually excerpts from Times writer Kurt Eichenwald’s forthcoming book on the subject).   It reads like a soap opera (by both design and because that’s really what this story amounts to).  The amazing take-away for me was just how far Enron had strayed from the most basic forms of financial management (they didn’t track their cash balance, nor did they track when their debt came due – so they had no idea either what they owed or how much they had available to cover that debt).
Take a look at the article here (in case the link doesn’t work the url is http://www.nytimes.com/2005/03/13/business/yourmoney/13enron.html?) .  It’s worth a read.

I can’t state it more simply or directly than the title to this post – you should be coming to the Defrag conference (www.defragcon.com). 

Foundry started Defrag with conference veteran Eric Norlin to bring together a group of technologists to talk about the challenges around increasing fragmentation of data online and the tools and technologies that are being developed to make sense out of this data mess. We strongly believe that rather than sitting on the sideline watching and listening to the conversation taking place within the markets we care about that we should be actively facilitating and participating in that discussion (you’ll hear more about a new conference we’re working on withe Eric soon).

With industry thought leaders such as Esther Dyson, Doc Searls, Chris Shipley and many others, the conference is a hotbed of new ideas.  Most importantly the sessions are designed to stimulate debate, discussion and disagreement and the engagement level of the attendees is truly unique.  This is truly a "must not miss" event.

I’ve been to a lot of conferences over the years and think the most of them pretty much suck. They are too preachy, the attendees are too varied and numerous to enable meaningful interaction and they skim the trees in terms of content.  Defrag couldn’t be more different.  It is everything conferences should be – stimulating, engaging, meaningful and thought provoking. 

Register Now!

Special note to my Denver/Boulder readers: It’s not often that a world class technology conference sets up shop in our area. We specifically located Defrag in Denver to help encourage local entrepreneurs and companies to become even more a part of the conversation.  The conference brings world-class thought leaders to our hometown.  I’ve seen the registration data – the conference is attracting talented entrepreneurs from all around the country. But registrations from Denver/Boulder are lagging.  What gives? Represent for your local community. Take part in the national conversation.  Get to Defrag!

Today is the 36th anniversary of the first moon landing (July 20, 1969).  Moon’s almost full, so you’ll get a great look at it.

Google put up a moon site recently – www.moon.google.com.  Be sure to zoom all the way in <g>.