Benjamin Kuo’s Blog

I’m spending some more time today at the Forbes Meet conference, up next is an interview with Randall Stephenson of AT&T. I think the more interesting session is probably “Winning the War On Search” later this afternoon. (Last night’s gadget session was pretty interesting…).

The current Forbes MEET session is “Silicon Valley Meets Hollywood”. Youtube’s Chad Hurley, David Siminoff of Venrock, and Dan Scheinman, SVP and General Manager of Cisco are talking with Quentin Hardy of Forbes.

The discussion briefly touched on the venture capital industry, with Siminoff saying: “…It feels like June of ‘99″ at the peak of the Internet bubble. Siminoff and Hardy talk about lots of VCs “looking for an exit”. I think the $15B valuation of Facebook and Microsoft investment has some folks here shaking their heads. Earlier in the day, Barry Diller commented on Facebook and said “Paying $10 to $15 billion for anything, much less something without any revenues, is somewhat suspect.”

Barry Diller was the keynote speaker at lunch at the Forbes MEET conference in Beverly Hills today. Diller’s one of the folks who really seems to “get it” in terms of where things are going, and understands both the technology and old media businesses.

My favorite quote from Diller at the lunch: “The difference between Hollywood and technology is innovation. You have to put dollars into innnovation. You have to, if you’re not you can’t play.” Diller went on to explain how the old model of distribution does not work, and that in order for the “old media” folks to survive in the new world of the Internet they need to be creative. Asked what advice he’d give to media companies, he said: “Do not think about replicating or finding the next opportunity by price, actually get in there and make things,” saying that you’ve got to focus on original creation.

I’m spending the day at the Forbes MEET conference in Beverly Hills, and I’ve noticed an interesting shift this year in the speakers and conversations here. Last year, there was a huge focus on user generated content (YouTube had just been purchased by Google). This year, there’s a continuing theme of focus on the business models behind the content.

I’m sitting in a session on “Trolling the Web for New Talent”, with Luke Barats and Joe Bereta of Youtube hit makers Barats & Bereta, Jason Nadler, head of the United Talent Agency’s UTAOnline, Ben Relles, creator and founder of BarelyPolitical.com (the site behind Obama Girl), and Brent Weinstein, CEO of 60Frames, and the underlying current seems to be a focus on “sustainability” and an overwhelming amount of content.

Some tidbits:

Nadler: “It’s not about viral success, it’s about consistent success. It’s not about the one video. It’s sustainability of the hits.”

Bereta: “You can’t bank on viral. The internet audience is very fickle.”

The mix of companies here is slightly different, too, the earlier session was heavy on the infrastructure providers: John Edwards at Move Networks (CDN/video delivery), Ashwin Navin of BitTorrent (doing lots of plugging of their back end P2P delivery service for content providers), and Brendan Traw (Intel’s Digital Home Group CTO).

Some spectacular images of the Southern California wildfires from NASA, which has been posting satellite image updates over the past couple of days at the NASA web site:

I couldn’t help but noticing this interesting opening line from Michael Arrington in his review of La Jolla-based ProQuo last night:

 This may be the most useful website you ever read about on TechCrunch.

I’m hoping there are lots of useful websites and companies in the list of companies we’ve been interviewing.

Arrington doesn’t mention it, but ProQuo is the latest analytics startup out of the San Diego area - with founders from ID Analytics, Basepoint Analytics, and HNC Software.  San Diego has a wealth of companies in the sector, including FairIsaac (the company behind the FICO mortgage score). In fact, the San Diego Software Industry Council has been putting on an event (the forum on Analytics, which we are a media sponsor) around the industry. (Unfortunately, it looks like the event has been postponed due to the fires, but, when it does happen should be interesting…)

A significant number of our readers are from the San Diego area, which has been thrown into chaos by the wildfires. We’ve received quite a number of (automated) emails from our readers this morning indicating they have been evacuated and/or that their offices have been closed. Our thoughts and best wishes go out to all of them, and everyone else who has been affected by the fires.

There’s a interesting article in the New York Times today talking about the ingredients of why Silicon Valley spurs so many startups. There’s a funny quote from Craig Johnson, a Bay Area VC, who says:

MR. JOHNSON, the venture capitalist in Palo Alto, noted that the greater Los Angeles area also has a pool of talented engineers (working at aerospace companies like Lockheed, Northrop and Hughes) and great universities (notably Caltech and U.C.L.A.) and plenty of money to invest. “But in Los Angeles,” he said, “people are scattered across a wide area; everything is more spread out.”

It’s harder for entrepreneurs to meet with one another and with investors, he added. And that means connections take longer, deals move slowly, fewer companies are formed. “Like a gas, entrepreneurship is hotter when compressed.” he said.

I found the entire article amusing because it demonstrates the “perception lag” we have here in terms of our technology activity. There’s a lot more, entrepreneurial companies here supplying the “raw material” for Southern Californias tech industry than Lockheed, Northrup, or Hughes. In fact, I don’t see a whole lot of crossover from the defense engineers to join startups. What I do see, is the people who have worked for successful progressive companies - Overture, Broadcom, Qualcomm, LowerMyBills, Pricegrabber, MySpace, etc. - driving the growth in the industry.

Well, the latest quarterly venture capital numbers are in — from both PricewaterhouseCoopers/NVCA/Thompson and Ernst & Young/VentureOne. According to the PwC/NVCA report, Southern California had $784.4M in venture deals for the quarter, placing us third in the nation after New England ($998M) in venture deals. However, Ernst & Young/VentureOne reports that Southern California had $961.3M in venture capital investments in the quarter, with 78 financings–making us number two, beating out New England’s $849.1M in deals.

Either way, depending on whose numbers you use, there was still a hefty amount of investment in the area in Q3. A quick, unaudited query of the socalTECH database actually totals up $1.258B in deals for Southern California, but there’s normally a great deal of variation between various databases (depending on reporting, dates of funding events tallied, etc.).

After some questions from visitors to our site, we’ve upgraded our archives page to allow for more browsing of stories by month. Month-to-month coverage extends back to January of 2004; Interviews are available until July of 1999.