SortiPreneur

Miracle Fruit of Venture Capital

A small berry makes everything you eat afterwards make sweeter, as the NY Times reports:

[A] small red berry called miracle fruit ...  rewires the way the palate perceives sour flavors for an hour or so, rendering lemons as sweet as candy.
...
The cause of the reaction is a protein called miraculin, which binds with the taste buds and acts as a sweetness inducer when it comes in contact with acids...
...limes were candied, vinegar resembled apple juice, goat cheese tasted like cheesecake on the tongue and goat cheese on the throat. Bananas were just bananas.

The venture capital industry has its own version of these miracle fruits.  In 2005, the miracle fruit was social networking.  In 2006, user-generated content, and in 2007, web video, when mentioned in a business plan, made made it sweeter.

I am not sure what the miracle fruit in 2008 is.  It seems to be a cautious year, so maybe it's positive cash flow.

The Enterprise Disruption

I think there's a slow but dramatic change coming over to enterprise computing.  This is simultaneously put into effect by multiple factors:

• Open-source software
• Cloud computing
• Ubiquitous access to the cloud
• Moore's Law in hardware
• User experience being shaped by connectedness

A few weeks ago, Peter Rip had a good post on the same topic.  He said:

Let’s fast-forward another ten years.  If the market price of provisioning an application goes to zero more broadly, who is impacted?  What does this mean for

• SaaS application providers? 
• Enterprise IT?
• and vendors like BMC, IBM, and HP that dominate data center automation today?

Perhaps the value will shift from applications to infrastructure. Security, disaster recovery, archiving, etc., will still be needed - as services, not products. Freemium comes to enterprise computing.

We all know that the history of computing has been about platform shifts.  Free is the next disruption.  Like all platform shifts, it begins as a small but structural change in the economics of adoption. It ends with the re-alignment of the market, with a couple of survivors, and many more new entrants. 

I fully agree with his re-alignment point.  However, I think Peter's overstating the value of the infrastructure.  Things like security and redundancy, while important, will be face with inevitable commoditizing forces, just like  operating systems.  I bet there are very effective disaster recovery systems out there (or under development), operating on the cloud and bringing down costs.

Where I think the real value will be created is the user experience side.  It will be things like good design and usability that will create differentiators and end up impacting the results that technology delivers.  And much more so than before.

A few years ago, an enterprise had to use "enterprise grade" solutions.  Others would probably not hold up.  You had to get an Exchange Server from Microsoft for your email hosting because the lighter apps would fall short in one aspect or another.  But today, the lighter apps are on S3 servers or on Google Apps.  The cloud is enterprise grade.  You can use GMail for your enterprise mail and it will be more secure and reliable than MS Exchange.

Who should be watching this shift in enterprise computing?   I think it's the small innovators, players like  37signals or SelectMinds, who have straddled the enterprise fence, or consumer services like grou.ps or del.icio.us, who can tie in their service into the enterprise.  Their time has come.

Plaxo & Comcast: I Don't Get It

Plaxo, having been on the block for a while according to rumors, is acquired by Comcast.  TechCrunch puts the price at $150m-ish.  I think it's a loser in the long run.

I don't mean this financially.  I have not seen any figures on Plaxo but I presume the Comcast team considered many scenarios.  They may end up very happy with the accretive value they receive.  I mean the deal makes little sense to me strategically.

Comcast is a pipe owner.  Its competitive advantage lies in the old economy.  Access will continue to get commoditized.

Plaxo is not a true social media company.  It has the wrong DNA:  It grew through spamming.  It may have lots of data but it has little engagement or passion.  I find Pulse totally useless.  It know almost nothing about the context in which i am connected to others through its system.  It's the anti-Facebook.

I commend Comcast on the boldness and vision.  But they picked the wrong company.  I suspect it will try to offer Plaxo's quasi-social graph to its subscribers or lay it over its media properties and affiliations.  Well meant, but it will not work.  I think Plaxo's recent signals of openness, like its participation in Open Social, were decoys and PR moves.  They remain closed in their DNA.

It looks like RWW agrees with me on this, and others don't.

$1 Billion of Online Pizza

A CNN article reports that Papa John's Pizza has sold over $1 billion of pizza through their online ordering service.  The article is titled "Mamma Mia!" and I concur.

This puts a big smile on my face as I am one of the investors in the recent series A round raised by YemekSepeti.com, the leading online food delivery service in Turkey.