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NSFW: Jimmy Wales Wants Me Dead (The Neutrality Of This Article Is Disputed)

Some weeks, writing this column is easy. All it takes is for an influential person – a politician, a business person, perhaps even a fellow columnist – to say something dumb and I get to spend a thousand words or so explaining precisely why they’re wrong. The “why x is wrong about y” construction is the columnist’s best friend: it’s as old as the hills and even easier to build a house on.

Some weeks though, it’s even easier than that. Someone will say something so breathtakingly wrong – so tracheotomy-cravingly moronic – that I don’t need to explain anything. Simply quoting their words back at them is sufficient to make the point.

Step forward, Jimmy Wales.

Speaking this week at the Guardian’s Guardian Changing Media Summit, Wales – the founder of Wikipedia – uttered the following statement when asked about the future of newspapers…

“I don’t see the added value [of opinion columnists] and question whether a newspaper should be paying large sums of money for them anymore… The best of the political bloggers are easily the equal of the opinion columnists at the New York Times.”

Those words could stand alone as a monument to Wales’ wrongness – a warning for future generations on why we must never heed the advice of a man who calls himself ‘Jimbo’. But the very fact that Wales was invited to opine about the future of news at a major conference despite having no identifiable qualifications to do so compels me to elaborate. If people take his opinion on newspapers seriously enough to ask him to speak on the subject then there’s a terrifying possibility that they’ll take him seriously enough to act on his advice.

And who could blame them? Newspaper owners are terrified – destroyed by madness, starving hysterical naked – and desperately seeking any advice on how to cauterize their bottom line. The cause of their madness is, of course, the Internet and so it’s logical – after a fashion – that they should turn to Wales for answers. After all, he’s The Man From The Internet: surely he has all the answers?

Yeeeeah. Not so much.

For the benefit of those poor befuddled newspapermen, let’s take a few minutes – and a thousand words or so – to break down all the reasons why you shouldn’t listen to Jimmy Wales when he tells you how to run a newspaper.

For a start, let’s consider what Wales actually does for a living. Or rather what he doesn’t do. He doesn’t own, operate or edit a newspaper. He doesn’t employ any journalists, has never sold an advertisement and he doesn’t have a single customer who pays to read the content he relies on volunteers to produce. For those reasons, his lack of understanding of the “added value” that high profile personalities bring to newspapers is understandable – forgivable even. Or at least it would be were it not for the fact that Wikipedia uses Wales’ own high profile personality to encourage its users to donate money in order to ensure its survival.

“A message from Jimmy Wales” reads the banner at the top of Wikipedia entries during the site’s regular donation drives. These banners link to a personal appeal for support, written by Jimbo and complete with an above-the-fold photo of his face. Jimmy Wales is the first encyclopedia editor since Alain T. Britannica to build a cult of personality around the gig. Why? Because he knows that personality creates familiarity, which in turn creates loyalty, which in turn creates value. Except, apparently, when it comes to newspapers.

Which takes us to the real nub of Jimmy Wales’ wrongness. No one would argue that the newspaper industry – in print form – is screwed. Speaking at the same Guardian conference, media commentator and Murdoch fanboy Michael Wolff summed the situation up nicely when he said “Every big-city newspaper in the U.S. is either in bankruptcy or will be in bankruptcy in the foreseeable future – that’s 12 months. The newspaper industry in the U.S. is over”.

The future of news is online, but that future brings with it the total commoditisation of facts and the death of straight reporting as a way to drive reader loyalty. Newspapers aren’t just competing with other newspapers, but also with Twitter and Facebook and blogs and thousands of other channels through which facts can be disseminated. If one paper puts its news behind a pay wall, the chances are that same news will be available elsewhere for free. Even with high quality investigative reporting, if the story is big enough then someone will simply rewrite it – perfectly legally – and post it on a blog, where it will then be reblogged and retweeted and aggregated. (The aggregators themselves encourage this: Gabe Rivera told me recently that the best way for a blogger to get content on Techmeme is to paraphrase something that previously appeared behind a pay-wall).

The battle to force people to pay for general news, then, is lost. Likewise, thanks to micro-aggregators like Techmeme and macro-aggregators like Google News, the fight to maintain reader loyalty through news reporting is finished too. Sure, some people may still cling to the BBC or the New York Times out of habit, but the trend towards decentralisation – with readers choosing their news source on a story-by-story basis – is inexorable.

There remains, however, one reason to remain loyal to a single newspaper – or at least to visit that newspaper’s online edition every day. And that’s for its editorial voice: the unique tone with which a publication interprets the basic facts of a news story and helps us form an opinion on it. Which, of course, is where columnists come in.

Columnists – and other opinion-driven journalists – are the heart and soul of a news organisation: they’re what makes us tune in to Fox News (Glenn Beck, Bill O’Reilly) or MSNBC (Keith Olbermann). They’re why we buy the Wall Street Journal (Peggy Noonan) or The New York Times (Maureen Dowd). Newspapers know this of course, which is why when Murdoch desperately (and misguidedly) wanted to protect hard-copy sales of his flagship UK tabloid, The Sun, he removed his big name columnists from the web and confined them to print.

Wales may claim that the best political bloggers are better than their mainstream rivals but he’s wrong about that too. For a start, professional columnists carry with them the weight of their entire publication. Maureen Dowd’s opinion pieces are so powerful because they are packed with insight and fact, much of which stems from the access she enjoys as an internationally recognised columnist. The vast majority of independent political bloggers can only dream of that kind of access and are instead forced to rely on second-hand reporting for the basis of their writing. But even if a political blogger does manage to deliver the goods, it’s only a matter of time before they’re snapped up by the mainstream media. I don’t care what crap they spout while they’re struggling to make it, every political blogger in the world would kill their own puppy to write for a nationally – or internationally – recognised publication. The first thing Nate Silver did when FiveThirtyEight went stellar? Take a gig at the New Republic.

This symbiosis – columnistists clamouring to write for newspapers, and newspapers needing great columnists to define their voice – is where the real key to the survival of newspapers lies. Rival papers, and bloggers and Twitterers may summarise and rewrite your news scoops, depriving you or readers, but they can’t do the same with your columnists. Personality is simply not reproducible – there’s only one Maureen Dowd and there will only ever be one Glenn Beck (inshallah) so if readers want to hear what they have to say, they have to go to the source. Moreover, while news ages rapidly, opinion doesn’t. A story published online by the New York Times is dated the moment it appears and people begin tweeting out the key facts, but a well-crafted opinion column has an infinite shelf life.

For all of these reasons, only the most imbecilicly terrified newspaper editor would heed Jimmy Wales’ advice and fire their most valuable assets. For all the others, there’s actually a compelling argument to do precisely the opposite. It’s comment and opinion, not news, that really adds value to newspapers in the Internet age – and as such the really smart editors will get rid of all their costly reporters and use the money instead to fill their pages with nothing but highly paid opinion columnists. Only then can newspapers be assured of their survival.

I know it sounds scary, newspaper owners, but you’ll just have to trust me on this one. After all, I’m The Man From The Internet and I have all the answers.

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Made.com Secures $3.75m To Assault Designer Furniture Industry
Made.com, a web-based furniture company, has raised £2.5million from investors to launch its service which connects buyers directly with manufacturers thus cutting out middle men.

The backing comes from Lastminute.com cofounder Brent Hoberman now of mydeco.com, PROfounders Capital (whose investors include Michael Birch ex of Bebo), investor John Hunt and Marc Simoncini through his investment vehicle, Jaïna Capital.

Made.com was created by 28 year-old serial entrepreneur Ning Li, who was a cofounder of Paris based MyFab.com which has proved the feasibility of connecting furniture buyers with makers.

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Excelerate Labs Brings A Startup Incubator To Chicago

It seems that Y Combinator and TechStars-like incubators are popping up everywhere. BoomStartup just launched an incubator in Utah and TechStars is expanding to other cities in the U.S., as is The Founder Institute. Chicago has a new incubator that recently launched, called Excelerate Labs.

Excelerate is the brainchild of OKCupid entrepreneur Sam Yagan, Kapil Chaudhary, Kelli Rhee, and Troy Henikoff. Yagan says the Chicago-based incubator has a similar model to TechStars and Y Combinator. Six to ten startups will be chosen for a three month long program, where founders will be given resources to build their products, access to mentors and funding. Each startup will receive anywhere from $15,000 to $20,000 (depending on the number of founders) for five percent of equity.

The program is currently accepting applications until April 2. Yagan says that one of the reasons that we wanted to start the program was to help make Chicago become “the Silicon Valley of the Midwest.” Sandbox Industries and i2a Fund have invested in the incubator, but Yagan says that other venture funds have taken an active interest in Excelerate, including DFJ Mercury. Mentors include TechStars founder David Cohen, OpenTable’s Chuck Templeton, Apex Ventures Partners’ Lon Chow and a host of other notable entrepreneurs and investors.

Groupon directors Eric Lefkofsky and Brad Keywell, also recently launched Lightbank and will invest as much as $10 million annually in early-stage technology companies through a new fund dubbed. Similar to Excelerate, the fund aims to help establish Chicago as a technology hub.

It’s always great to see investors and former tech executives investing time (and money) in promising startups and ideas. And we are seeing a plethora of innovative startups emerging from a variety of incubators around the country and world, including Y Combinator, TechStars, The Founder Institute, Launchbox Digital and more.

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Novell Rejects Hedge Fund’s Offer To Take The Company Private For $2 Billion

New York-based hedge fund Elliott Associates L.P. in a letter to Novell’s board of directors dated March 2 offered to purchase the infrastructure software company for a cash price of $5.75 per share, or $1 billion net of the cash on the company’s books.

Elliott Associates at the time said it already owned 8.5 percent of Novell and wanted to take the company private for $2 billion.

This morning, Novell’s board publicly responded to the letter, deeming the “unsolicited, conditional proposal” from the hedge fund “inadequate”. It’s not hard to see why Novell feels that way: immediately after the initial purchase offer was made, its shares surged as investors hoped for a better bid, and stock value hasn’t decreased much since.

Shares were valued at 5.64 at market’s close on Friday – it was priced 4.20 at the beginning of this year and 4.75 when Elliott made its purchase offer public on March 2.

Unsurprisingly, Novell’s board of directors said it would start looking for alternatives for the company to “enhance stockholder value”, including a sale to another entity, joint ventures, partnerships or a return of capital to stockholders through a stock repurchase or cash dividend program.

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Integrating Ethics Into The Core Of Your Startups: Why And How

When I came to the U.S. in 1980, I was young and naïve. I used to think that corruption and ethical lapses were just a third-world ill. Eventually, I became a tech CEO and learned the harsh realities of American business. Yes, standards are much higher, and breaches are punished, but the temptations are just the same here as they are in any other country. Ethical lapses (which are a form of corruption) are quite common.  You watch stories about these on TV every other day and read about them on TechCrunch.  It was the ethical lapses of our financial institutions that threw our economy into a tailspin, and for which we are paying the price, after all.

It is best to be aware of the temptations and to prevent the lapses from occurring. As Enron, Bernie Madoff, and Lehman Brothers have shown, it’s a slippery slope. Once you start compromising your values for short-term gains, there is no turning back. Business ethics are not something you need to start worrying about when your company reaches a certain size; they need to be sewn into the fabric of your startup from the get-go. The lessons are the same for tech businesses as they are for investment banks and for third-world economies.

Harvard Business School professor Michael Beer researched the difference between companies that perform at high levels for extended periods and those that implode when they reach a certain size. When analyzing the spectacular failures in the recent financial meltdown, he found that:

• Of the original Forbes 100 (named in 1917), 61 had ceased to exist by 1987.  Of the remaining 39, only 18 stayed in the top 100, and their return during the period 1917 to 1987 was 20% less than that of the overall market.

• Of companies in the original Standard & Poor’s 500-stock index of 1957, only 74 remained in 1997; of these, only 12 outperformed the S&P 500 in the period 1957 to 1998.

• The average CEO tenure in the U.S. is 4.2 years, less than half the 10.5-year average in 1990.

Beer posited three core reasons for the failure of so many Wall Street firms in the fall of 2008: the firms lacked a higher purpose (in other words, they were focused on short-term gains, profits, and bonuses); they lacked a clear strategy; and they mismanaged their risk. Companies like Charles Schwab and US Bancorp were able to avoid the fallout by having a laser-like focus on customer service and on honesty and transparency. Neither company touched the subprime mortgage securitization market, because they saw it as risky and simply not the kind of business that served the company’s long-term interests.

Even outside Wall Street, companies like Cisco Systems, Southwest Airlines, and Costco Wholesale, with the strongest sense of higher purpose, achieved the greatest success. Take Costco. Wall Street analysts have long chastised Costco’s management for paying high wages and keeping employees around for a long time, because this results in higher benefits costs. But the company’s CEO, Jim Sinegal, lives by his belief that keeping good employees is strategic for Costco’s long-term success and growth. The company’s per-employee sales are considerably higher than those of key rivals such as Target and Wal-Mart; customer service at the stores is phenomenal and fast; and Costco continues to expand, both in number of warehouses and in products and services for business and consumer customers. The culture of the company flows downward from Sinegal and his focus on employees and, by extension, to customers.

One of the problems that Beer found with the failed banks was that their employees lacked the ability to “speak truth to power”. Employees felt intimidated by superiors; the institutions’ internal voice of conscience and purpose was silenced by a maniacal focus on short-term profits and whatever scheme would bring them in. The silencing of employees who sought to challenge strategy and risk-management practices likely also undermined the banks’ moral authority and emboldened those who already felt inclined to do the wrong thing. With a muted internal voice, these organizations lacked a moral compass. As a result, they drove off a cliff with astonishing speed.

The same things happen in Silicon Valley companies.  I asked management guru — and head of the CEO Institute of Yale School of Management — Jeff Sonnenfeld for his advice on how startups can sow the seeds for building a Cisco or Costco. Here is Jeff’s advice:

1)  Create a culture of openness and welcome dissent – Internal constructive critics are your best friends — too often, founders are blinded by their own enthusiasm for their creative vision and then are surrounded by sycophants, kissing up. Founders who fall out of touch rapidly lose their ethical bearings. At Intel, founder Robert Noyce and Gordon Moore did not look for sycophantic followers in selecting the brilliant, contentious, but relentlessly honest Andy Grove as their colleague and successor. Similarly, Craig Barrett and Paul Otellini have consistently fought for different points of view internally — without undermining the enterprise, and always reinforcing Intel’s self-critical core ethic.

2)  Lead by example.  The authenticity of the leader’s character is essential — if colleagues don’t believe you, they will not take needed risks on your behalf — such as training subordinates to be able to do their own jobs.  Startups are often defined by the hip clichés of VC firms, adoring press, and HR consultants — but the startups don’t really practice what they preach.

3)  Learn from immediate peers or distant models. Too often, founders atrophy because they believe that the unique quality of their business or technological mission means that they too are truly unique in leadership values.  Steve Jobs has patterned himself after Polaroid founder Ed Land — and tried to learn from Land’s strengths and weaknesses.  Henry Ford regretfully once claimed “History is bunk” but in reality revered Thomas Edison.  Michael Dell put legendary tech entrepreneur (Teledyne) and educator Dr. George Kozmetsky on his board right from the start to learn from this brilliant then septuagenarian.

4)  Recognize your own fallibility as a leader, know your limits, and beware of the myth of immortality.  Entrepreneurs often are horrified at the thought of leadership succession. The founders of great firms such as Google, Cisco, Amgen, and Microsoft have known that they would need to prepare for a day when they no longer could be the lone day-to-day internal boss, primary external ambassador, and symbolic cultural icon. The founder of the original (pre-Starbucks) coffee house chain Chock-Full-o-Nuts started his first café on Broadway 43rd Street in 1923 and was a great national success.  Sadly, sixty years later, as a dying man who had been flat on his back for two years at Massachusetts General Hospital in Boston, he still clung to the job of leader of the enterprise, his full-time physician serving as acting president.

5)  Remember that institutional character — like a liquid cupped in your hand — is fragile; easily lost; and hard, if not impossible, to regain. Egomaniacal moves, personal grandiosity, greed, and deception create impressions that are hard to erase.  Whole Foods founder, John Mackey, sabotaged the integrity of his own exalted brand, damaging the company’s internal pride and customer admiration far more badly than any competitor could have, due to his self-inflating and his misleading “anonymous” blogging, hiding his identity through an anagram of his wife’s name, “rehodab.”

I’ll add another very important point: Establish an independent board. Venture firms often demand a majority of board seats as a condition for their investments. Conflicts invariably arise. The board begins to serve the needs of VCs and management, rather than of the company itself, which loses the independent voice to warn it not to do the wrong things. The inconvenient truth is that all board members have a fiduciary duty to act in the interests of the company, and not in their own interests. Board members must not engage in transactions in which they or their partners stand to gain. They are legally required to avoid these conflicts of interest.

Finally, remember that in business, you have to make tough choices at every juncture. Though business decisions usually have clear consequences and outcomes, ethical decisions are always hard. Making the right choice doesn’t always bring success, but ethical lapses almost always lead to failure. No matter what the consequence, doing what’s ethical and right is always the better long-term strategy.

Editor’s note: Guest writer Vivek Wadhwa is an entrepreneur turned academic. He is a Visiting Scholar at UC-Berkeley, Senior Research Associate at Harvard Law School and Director of Research at the Center for Entrepreneurship and Research Commercialization at Duke University. Follow him on Twitter at @vwadhwa.

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Check-In Fatigue. Or, Why I’m Rooting For An All-Out Location War.

I didn’t have the same problems at SXSW this year that some people did. Was it too crowded? Sure. But there were plenty of alternative things to do. Did some of the keynotes bomb? Yes. But there were plenty of other things to listen to. Did AT&T fail? No. Actually, they did an awesome job keeping the network up. Instead, I had a problem of a different kind: check-in fatigue.

Seeing as location was this year’s Twitter at SXSW, and seeing as I write a lot about location, I wanted to try to use as many of the services I could during the actual conference. I drastically underestimated how much work that would actually be.

At first, I was using all of the services I had on my phone to check-in when I arrived at a place in Austin. This included: Foursquare, Gowalla, Loopt, Whrrl, Brightkite, Burbn, MyTown, CauseWorld, Hot Potato, Plancast, and (at certain places) Foodspotting. Even with great AT&T service, this would take a solid 10 minutes or more to check-in to each of them. And it took even longer when I’d have to pause to explain to my friends what the hell I was doing on my phone all that time.

The situation simply wasn’t tenable.

By the second day, I had cut the services I would check-in to in half. It still wasn’t close to being something I would consider doing on a regular basis. By the end of my time in Austin, I was down to using only two services — yes, the two in the midst of the “war” — Foursquare and Gowalla.

Pretty much everyone I knew in Austin were also using both Foursquare and Gowalla to send out all their check-ins. And all seemed to agree: it was still too tedious to use even just two services to do the same thing. In the end, there should be only one.

And so it should be no surprise that a few companies are already working on a solution for this problem. One is by the creators of Brightkite, who managed to obtain the killer check.in domain name. The team showed me a preview of the app at a party one night, and I immediately knew it was exactly what I needed (see a preview of it here).

But there’s a problem with this solution too. Currently, Gowalla’s API is read-only, which means you actually can’t use another app to check-in to the service. I spoke with CEO Josh Williams a bit about this just prior to SXSW, and he noted that the main thinking behind this is to maintain the user experience Gowalla is looking for (a very Apple-like argument). But, he did say that eventually he thinks they will open up a two-way API — maybe once they have time to create some best practices documentation, he noted.

Another problem is that currently each of these check-in services has their own places database. That means that a place on Foursquare may be slightly different than a place on Gowalla, even though they’re technically the same place. Worse, there are plenty of duplicates for some venues since people are allowed to create their own. Check.in works around this place problem by doing a look-up on each service and letting you pick the correct check-in spot. But it’s a bit slow, and still seems rather tedious.

A better solution would be for the various services to adopt a standard for places. The Activity Streams group is working on such a concept. Yahoo may also be able to implement such a system on top of its WOEID system. Of course, any service that adopts such a standard would be risking at least part of their business since these place databases are one of the keys to each service.

Meanwhile, Facebook is thinking about aggregating data from both Foursquare and Gowalla for its own upcoming location implementation. Might that be the one location stop to rule them all (of course, the writing back to Gowalla would still likely be an issue)? Not if Twitter has anything to say about it.

I love that all these startups are emerging around location right now (at least a dozen more have emailed me just since I’ve been back from SXSW). But I’m starting to worry that this is going to turn into a repeat of the social wars, where we all have 15 different profiles we constantly have to update across a range of networks.

During our Realtime Crunchup last year, I brought up this issue during our panel on location. All the players on stage (including Twitter, Foursquare, Hot Potato, Google Latitude, GeoAPI, and SimpleGeo) seemed to want to say that they could all get along and play nicely together for the betterment of location as a whole. I didn’t buy it then, and I’m definitely not buying it now.

From a business perspective, it doesn’t make sense for these guys to all play nicely with one another and make it so you don’t have to use their services. The need to take steps to ensure that you will use their service, and will do so instead of a rival service. That’s the way it works, and that’s the way it has always worked. And that’s why it’s a war. Right now, it’s just the early stages where all sides are arming themselves. Soon, they’ll try to kill one another. And that may not be such a bad thing.

[photo: flickr/intagiblearts]

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Google Hands Of Its First 1337 Cash Prize For A Chrome Bug

Back in January, Google announced that it would follow Mozilla’s lead and start offering cash bounties for bugs found in the code of Chromium (the open-source browser behind Chrome), or Chrome by the community. Google both matches Mozilla’s $500 and ups the bounty all the way up to $1,337 (yes, 1337) for “particularly severe or particularly clever” bugs. This week, they rewarded the first of those.

As noted on the Chrome Release blog, Google made four cash payments on Wednesday. There were two $500 prizes (both for memory errors), one $1,000 prize (for a cross-orgin bypass), and the first-ever $1,337 prize. The lucky receipient of that was a man named Sergey Glazunov, who located a bug that Google is calling, “High Integer overflows in WebKit JavaScript objects.”

This crowd-sourced bug hunting seems like a great idea, especially for a browser moving through development as quickly as Chrome. Chrome has only existed for a year and a half and already they’re testing version 5.0. Stable builds of both the Mac and Linux version of the browser are likely to launch at some point over the next few months.

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Bootstrapped Social Network For Families Genoom Hits 1 Million Users

Who says you can’t attract a substantial number of users on a shoestring budget?

Spain-based social networking platform provider Genoom, which lets family members communicate amongst each other on private online community sites, is about to sign up its millionth user.

This isn’t exactly a huge milestone, but I think it is noteworthy since the startup is operating on a mere $80,000 in seed funding, which it raised from Midatel roughly 3 years ago.

Genoom was launched in July 2007 and will cross the 1 million registered users mark by this weekend. According to company spokesperson Bob Samii, the site is now available in 17 languages and counts more than over 10 million profiles from families all over the world.

On the Genoom website, users can add family trees, personal information, photos, videos, and related documents about ancestors and living relatives alike, limiting access to uploaded information through invitations and custom group privacy settings. This makes the service effectively a marriage between genealogy and social networking.

Genoom offers a handy Facebook application, allowing users to access their family tree and communicate with family, all while logged into their Facebook account.

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