Benjamin Kuo’s Blog

My interview with Mark Stevens, General Partner at Sequoia Capital, was posted this morning. From the interview:

…we have a bit of what I call an impedance mismatch–you have a lot of money coming into the system, into startups, but you don’t have a lot of highly valued exits. Is there a bit of a bubble? Yes, we’re concerned about valuations going up and too many companies being financed in certain categories. There’s definitely concern.

Also, other interesting links and coverage of local companies elsewhere this week:

Michael Arrington pans Michael Eisner’s Prom Queen project. Liz Gannes at NewTeeVee gets Eisner’s own thoughts on content.

StartupSquad looks at Los Angeles-based Teleflip.

The Alarm Clock looks at GoTV’s recent investment by Motorola.

I’ve found over the years that startup companies usually have lots of questions about office space and real estae. In fact (strange as it may seem), among the most well connected people in the local startup community are the commercial real estate brokers. As part of our Startup section, we’ve recently added an article from Ted Simpson and Scott Steuber giving some tips on real estate on high tech companies. We also have covered this in the past, interviewing Richard Abbitt at Venture Realty Group (a sponsor of socalTECH) on Common Questions on Real Estate and Startups. If you’ve got any good experience and knowledge to share with the entrepreneurs and are looking for a place to share it, let me know!

I spent the morning at the University of Southern California Celebration of Innovation, the launch of the USC Stevens Institute, a new effort by the school to advance research and innovation–and hopefully bring that innovation to market. For those who aren’t familiar with the USC Stevens Institute, the new effort is the result of a $22M gift from Sequoia Capital venture capitalist Mark Stevens to the school.

It was a standing room only crowd, and interestingly packed with not just who you might expect–technology transfer and University researchers–but a broad scope of venture capitalists from out of the area, press and media, and executives. It’s interesting how efforts of world class universities like USC get the attention not only of folks like those who read this blog–the venture capitalists, service providers, and angel investors active in Southern California–but also of others who are interested in tapping into the potential of a research university like USC.

Aside from the heavy turnout of Tech Coast Angels, I ran into a number of venture capitalists from Sand Hill Road, one from New York, and also spent a few minutes chatting with Bob Metcalfe, founder of 3Com and co-inventor of Ethernet (and now also a VC at Polaris Capital, an East Coast VC firm).

One of the key pieces of developing a healthy technology ecosystem, in any area, is how efficiently world class universities like USC, UCLA, Caltech, UC Santa Barbara, UC Irvine, UC San Diego and the other many very fine universities and colleges in the area convert the research–and students–into viable, growing startups. Efforts like the USC Stevens institute can act as a catalyst, to not only help technology spin out of the universities, but also make it attractive to start and grow technology firms in the region.

My interview with Mark Stevens of Sequoia will run later this week.

In other media covering Southern California companies recently: Fortune covers Santa Monica-based Headplay’s wearable displays. TechCrunch covers Los Angeles-based TutorLinker. More on Qualcomm’s EV-DO chipset in EETimes.

I was just reading an interesting article on map mashups in InformationWeek and noticed a mention of socalTECH’s venture capital map. The article discussing the business use of mashups, by Elena Malykhina at CMP , says:

It’s more common to find location mashups about the business world that have been created by independent developers, not the businesses themselves. A “deal map” at www.socaltech.com/intelligence/map, created with the Google Maps API, displays the geographic distribution of venture funding. Site visitors can narrow their results on a map by selecting an industry or round of funding. 

Just for fun, I ran our database of Southern California high tech companies through Alexa’s Web Services to figure out which ones have the biggest “mind share” on the Internet. There are thousands of companies here and this was done using some coding and Alexa’s Web API. (disclaimer: there’s some controversy over Amazon’s Alexa service and how well it measures traffic — it also is very “geek” and Silicon Valley heavy — but it’s a useful relative benchmark).

Top 25 privately held Southern California companies, ranked by traffic

Rank, Site Name, Alexa Rank

1. Break.com 279
2. NewEgg.com 423
3. Veoh Networks 759
4. Network54 915
5. Buzznet 970
6. eHarmony.com 1158
7. Edmunds 1270
8. E! Online 1286
9. Tom’s Hardware Guide 1730
10. Blizzard Entertainment 1855
11. Fandango 1910
12. Business.com 2001
13. Snap.com 2533
14. MeziMedia (Smarter.com) 2598
15. Reunion.com 2903
16. Stickam 3045
17. Submit Express 3121
18. Revver 3178
19. GameFly 3188
20. Bidz.com 3315
21. CrazyEgg 3890
22. US SEARCH.com 4041
23. vidiLife 4608
24. RealAge 5119
25. Media Temple 5435
Top 25 non-private Southern California companies, ranked by traffic

These firms are either public, or owned by another big owner somewhere else.

Rank, Site Name, Alexa Rank

1. MySpace.com 5
2. Neopets 154
3. Overture Services 209
4. Commission Junction 562
5. Shopzilla 638
6. PriceGrabber.com 646
7. CitySearch 734
8. Evite.com 760
9. Buy.com 898
10. Ticketmaster Corp. 926
11. Ifilm 989
12. United Online 1012
13. YellowPages.com 1368
14. Gateway 1601
15. Nero 1639
16.Userplane 2139
17. Linksys 2502
18. ArtistDirect 2939
19. MedicineNet 3235
20. PropertyFirst 3252
21. Rent.com 3288
22. Panda 3350
23. DirecTV 3405
24. Local.com 3408
25. Market Wire 4489

Top “Once Upon A Time” Southern California Companies

A few companies now part of some other organization and not running under their own names:

1. Launch Media 1 (Now Yahoo)
2. Applied Semantics 3 (Now Google)
3. Urchin 3 (Now Google)
4. GeoCities 71 (Now Yahoo)
5. Overture Services 209 (Now Yahoo)

Ernst & Young and Dow Jones VentureOne released numbers today on Web 2.0 investments in 2006, finding that 2006 investments in Web 2.0 doubled over 2005 — however, a lot of attention is also being given to a post by venture capitalist Peter Rip, titled “Web 2.0 - Over and Out“. Rip points out some traffic numbers showing web traffic trends (and dropoff) to Web 2.0 media sites like Techcrunch, Gigaom, and Technorati, and states:

Many of us in the VC community have been quietly wondering about the state of Web 2.0 innovation. We aren’t seeing much. Startup activity remains strong, but the consumer web landscape seems to be populated with the same bodies with different skins.  Another video deal here; another social networking deal there, and social [feature] everywhere.

Interestingly enough, I remember this happening back when online pet stores were the rage during the Internet boom. Fortunately, the majority of venture capitalists herein Southern California lived through (and have the scars from) last boom/bust cycle, and seem to so far avoided the herd mentality which seems to permeate Silicon Valley.

I pretty much spend every waking minute following venture capital deals and the news flow, but sometimes it still feels like drinking through a fire hose when it comes to deal activity here. Usually, Southern California has a few major VC deals a week, but we’ve just posted four deals to our news section this morning:  Amp’d Mobile (raised $107M in Series E), Numira Biosciences ($2.5M in Series A), LegalZoom.com (amount undisclosed), and REAL D ($50M).

One thing I often hear when I talk to venture capitalists in the region, is the need to encourage serial entrepreneurs in the area–both by funding their companies, as well as finding them “the next thing” at local firms. Serial entrepreneurs — who have “done it before” are considered a precious resource here by VCs, because they’ve gone through the entire cycle of starting a company, building it, and selling it. Talking with entrepreneurs over the past few weeks–recently with Jason Feffer, CEO of SodaHead.com , who was at MySpace; Scott Jarus, CEO of Cognition (J2 Global); Jake Winebaum at Business.com (Disney Online);  Richard Rosenblatt at Demand Media (MySpace/Intermix); it becomes apparent that despite what you might hear, Southern California indeed has a great pool of executive talent that has had experience growing and building great companies. Of course, we do lose some to Bay Area firms–notably, today, Mitch Lasky of JAMDAT just moved North to become a venture capitalist at Benchmark Capital, and recently Jason Calacanis of Weblogs/AOL went to Sequoia Capital, but often, they come back. For example, Stuart Macfarlane of InsiderPages.com–Insider Pages is a firm that started in Pasadena but was moved up north by its VC backers–is now back in LA at Momentum Venture Partners. You’ve also got folks like Suresh Nihalani at ClearMesh, who founded Accelerated Networks, ended up commuting every week to Silicon Valley, but moved back.

Actually I think the bigger problem in Southern California is that many of the potential serial entrepreneurs are too successful, and just end up retiring and don’t jump back into the startup game in an executive role.

I’ve noticed a fixture of the technology blogs in Silicon Valley, which I almost never see from technology bloggers in Southern California, which are photo posts of local “tech celebrities” and local technology launch/conference parties. So, I thought I’d put some pictures up from the recent Technology Council awards to help fill in that gap. The photos are from the Technology Council posted to Photobucket by Peter Pham, VP of Business Development at Photobucket (originally a So Cal guy himself).

Left: Eric David Greenspan, founder and CEO, of Make It Work. Right: Jeff Cohn, Tech Coast Angels

Left: Lawrence Ng, CEO of Oversee.net, Right: Steven Hughes of Silicon Valley Bank

Left: Robert Medrano, EVP at SOA Software along with a couple other guys at SOA

Jon Kraft, CEO of stealth startup Clone Interactive. Jon was also CEO of Bay Area digital music startup Pandora.

Left: Brett Caine, GM at Citrix Online/GoToMyPC. Middle: George Klaus, CEO of Epicor Software; Right: Lee Perlman, CEO of New Age Electronics. Plus, my hand on the left frame.

(Okay, so this isn’t exactly material for the Silicon Valley blog rumor site Valleywag, but then again this was an awards event