Business

Out of the box: Neogence relaunched

We are beginning to emerge from the box we have been hiding in. I updated the website for Neogence Enterprises last night. It is still a work in progress (I’m sure you will find a few placer graphics or incomplete text), but the bulk is there and working fine. We will be adding to it over the next several weeks, as well as polishing up some other websites that are related (like NIVARS or Mirascape).

The original plan was for us to stay “under the radar” for as long as possible, at least until we had a mind-blowing demo together. Also, we do not want to give any potential competitors too much information about what we are doing this early in the game. Because of the rapid rate of Augmented Reality gaining exposure on the blogosphere and in the public (companies like GE, Toyota, Lego and many others are beginning to embrace AR in marketing), I realized that we need to start getting our name out there. Now is the time to be establishing some brand recognition and cultivate enough exposure to start building a community.

2009 is just the beginning…

NIVARS

One of the projects I am working on is launching a new Center of Excellence for the Rocky Mountain Supercomputing Center (RMSC), which will be the National Institute of Virtual and Augmented Reality and Simulations (NIVARS). Yes, I know it is a long title, but there really isn’t a nice short term that encompasses all things virtual, augmented, and simulations. Maybe we should start saying using Dynamedia or something to refer to any or all of the following: virtual reality, virtual worlds, augmented reality, mmo, mmorpg, interactive, immersive, geolocative, contextual, meta, etc. etc. Much of the underlying technology is the same, so why not?

Anyway, NIVARS will officially launch its website later this month (January). In addition to acting as a center of excellence for RMSC, it will also engage in activities that promote innovation and advancing the state-of-the-art of dynamedia (see above!). This is purposefully somewhat broad in scope, as I want to have some elbow room to engage in and support research, publishing, conferences, think-tanks, collaboration, and mindsharing.

If you want to contribute ideas or volunteer some time, feel free to email me directly. We will probably have a formal launch of NIVARS in the Spring.

Vision and Plan

Vision without Plan is mere daydreaming and avails nothing. Plan without Vision is the definition of aimless mediocrity. Vision with Plan is the essence of greatness and can change the World.

I spend a lot of time thinking ahead, thinking big, and contemplating what is possible. I think that you have to think outside of the box and really push the envelop if you want to accomplish something worthy of effort. People that do so, and match this vision with plans, resources, and effort are usually called visionaries. Our history is littered with these giants that refused to settle for average, mediocre, or the status quo. On the other hand, people that just spin out ideas all day long without doing anything about it are generally derided as lazy daydreamers, or accused of having their heads so far in the clouds they live lives in fantasy and impractibility. Success changes that perception real quick.

As an entrepreneur I am regularly sharing ideas and thoughts with people. I always start with the macro…where is the horizon? How far can we go? What is possible? What is our potential? Then I move on to the micro…how do we get there? What do we need? What are the obstacles to overcome? What is the plan of attack?

This has always worked out well for me. Vision and ambition inspires people, and has magic to “stir men’s blood”. However, many people that I have encountered over the years are either small minded or so trapped in a rut of mundane living with blinders, that they are unwilling to consider new ideas (big or small). They can only see what has been done, time after time, in old and proven models. People like this are a dual edged sword…on one hand, they temper the visionaries and force the writing of plans, methods, and models. They are a necessary backbone to any venture. But on the other hand, they can suck the life out of an idea or vision and turn it into a hollow grey shade of its former vibrant self.

My advice to entrepreneurs is to find people with practical experience and wisdom that share in your passion and zeal for your idea and vision. Learn from them, leverage their experience, and listen to their advice…but the first time you encounter someone that tries to change, diminish, or flat out destroy your goal and excitement, divorce yourself from them quickly.

You would be amazed at how many angel investors and venture capital funds I have shared various ideas and plans with that either entirely missed the point, or flat out dismissed us. One of my favorite examples here happened to me in the early/mid 90s. I was seeking funds for a MMORPG startup in 94/95…we were going to be the first “real-time 3D” massively multiuser online role playing game. A few people laughed at us…”that can’t be done”, “there is no market for that”, “you can’t do real-time 3D graphics on a PC”, “people want to buy games one time, they won’t pay a subscription for it”, “the PC game industry is dead”, “why isn’t microsoft or yahoo doing this?”. You get my point.

The sad thing, is that this is not uncommon. It has happened throughout history. Many of our greatest innovators, inventors, scientists, and great thinkers had to fight with this. Now, what really kills me, is when people with no vision (and only occasionally a plan) find massive amounts of support and funding to do some mediocre, generic, “me too”, or whatever project. The ultimately fail in a miserable fashion. Again, history is littered with examples (do your own google search). The end result of this, is an increased pulling away from big ideas and innovators. If small ideas don’t work, big ones won’t either.

Of course, sometimes small ideas are successful, and this is perceived as an indicator that safe and small is the way to go, when in reality, it is because there is nothing else that is bigger, grander, or more innovative to compete against. I talked about this in my book…if you have bought rotten eggs all your life in the market, you base your judgments and values on rotten eggs. An outsider would determine that rotton eggs are a great business. But imagine that first time someone starts selling fresh eggs! I firmly believe that many industries and sectors out there (especially high-tech, social media, virtual worlds, mmorpgs, etc.) have been suffering from rotten eggs for so long, that we can’t recognize what we are settling for. We have become nearsighted and hunchbacked. We can see (and smell) our feet, but we miss the trees around us and we have no conception of the larger forest of possibility and potential.

We are at the edge of yet another new year, which means there is a collective feeling of rebirth, newness, and a clean slate. What will we make of 2009? Will we expand out of our comfort zone and expand our horizons? Will we take risks and strive for innovation and growth? Will we let ourselves be suckered in by the doom and gloom of a economic downturn or will we leap out of our seats and aggressively look for opportunities to seize?

As you reflect on the last year, I encourage you to think about doing something unexpected, unconventional, and different in 2009. Shake things up. Take some risks. Think big. Make plans. Start something new. Move to the other coast. Pick up a new hobby. Change the business model. Challenge yourself and the people around you. Get rid of your preconveived notions. Refuse to perpetuate hate, bigotry, or stereotypes. Reach across the aisle. Think, Do, Grow, Challenge, Innovate, Achieve, Succeed.

Your life is what YOU make of it. Don’t settle for less. Don’t be satisfied with mediocrity.

Keep your feet on the ground and your head in the clouds. Do something worthwhile and change the world.

Make no little plans:
They have no magic
to stir men’s blood.
-Daniel H. Burnham

Just for the record, I’m taking my own advice. I can’t talk about it now, but I’m neck deep in some mind-blowing life-changing industry-rattling world-shaking evolutionary revolutionary “OMG” stuff. My startup is starting to get some incredible traction and a table full of opportunities has fallen in my lap. The synchronicity of everything is a little jarring…it is all related and all dovetails quite nicely into our short and long term goals.

The fun thing? Part of this is going to create some unparalleled opportunities for other entrepreneurs and startups out there willing to really think outside of the box and be unconventional. I can’t wait to tell you about it. We have a chance to do something huge together. Screw the economy. I’m going to create jobs. That’s what entrepreneurs do best, isn’t it?

Hey, do me a favor and post a comment if any of this rings your bell. I get a reasonable amount of traffic on here and people don’t say much. Tell me what you think. Share your passions and ideas here.

(The Twitter Version of my quote: “Vision without Plan is empty daydreaming. Plan without Vision is aimless mediocrity. Vision with Plan can change the world.”)

 

 

Fear is the mind killer...

So the markets are in turmoil with an incredible amount of volatility. Some people are screaming about another Great Depression or a long term recession. A few are claiming that the sky is falling and we are all doomed. Regardless of these points of view, we are in a period of uncertainty (the political rhetoric and impending election aren’t helping either).

I’ve talked before about how important perception is, and how prophecy can be self-fulfilling. If we keep telling ourselves that we are destined for failure, we will most definitely find ourselves arriving there sooner rather than later. No thank you.

Now is absolutely not the right time to duck and cover, run screaming into the night, or hide under the bed gnashing your teeth. America is not in its death throes, and capitalism is not broken beyond repair. The stock market will recover (although this may be delayed depending on who wins the white house) and we will emerge stronger. Yes, I do think that the fundamentals of our nation and economy are sound. We are just experiencing a bump in the road because of bad practices in some sectors. Sure, these bumps are pretty big and they are far reaching, but that doesn’t change the larger picture. If you break your foot, you are going to have to limp for a while and it’s going to hurt, but you aren’t going to DIE. Even better, when your foot heals, the bones will be stronger.

If you have ever thought “I wish I invested back in 2xxxx when stocks were cheaper”, now is your chance. Whether we are in a correction or a massive drop due to investor lack of confidence or fear, there are a lot of opportunities out there that are undervalued now and won’t be for long. We may not have reached the bottom yet, but investing in stocks is something you do with an eye on the long term, not day to day gains or losses. 

You know, I was going to write a lot more for this post, but I think I will instead copy/paste an excerpt from an email I sent to someone earlier this week.

* * *

Obviously the country is in a pretty bad way, and I won’t get into the reasons why, they should be pretty self-evident if you have been watching the news and financial markets. I don’t think we are headed for another great depression, and I don’t think we are on the verge of spiraling down into a recession either. I do think that we are in for a tough ride in the short term, but ultimately I am very bullish on the economy, the markets, and our nation in general. These are exciting times for people willing to look ahead and roll up their sleeves…the opportunities are there.

I think if we pull back and look at things from some position of altitude, we can see that there are normal cycles that occur throughout history in politics, markets, climate, etc. I feel that we are coming to the end of one cycle and another one is beginning. The current crisis is, in my mind, the same as the pain associated with shedding a skin or emerging from a cocoon.

If you consider all of the things that are going wrong right now, I think that these are actually to the benefit of the country. I have been saying for more than a few years now that the country has gotten lazy, our ambitious hunger for innovation and our hopeful spirit has been stunted, both by the dot com crash (which has had far reaching deleterious effects on technology development, venture capital markets, etc.), various corporate scandals (like Enron and the more current fiascos), and so on. All of this together is causing pressure to build that becomes a driving necessity to do, to change, to create, to risk, and to strive for something better. The middle class will rekindle its sense of entrepreneurial spirit and we will begin looking inward more…towards our local communities, churches, neighborhoods, etc. In every time of crisis, the people of this country always stand firm with resolve to survive and then surpass. It may take a few years, but I think we will come out of this much much stronger. I can’t stress enough how important it is that the shift back to community and locality is occurring…part because of the economy and its problems, but also because of how technology is changing and how we perceive, interact with, and consume media and information.

Getting back to the economy though, whether we are going through a correction or a short term loss, we will absolutely rebound. I do think it will be a long time before national confidence in real estate and the financial sector is restored, so I think that the opportunities in the future are going to be on energy, technology, and defense (for different reasons compared to energy/tech).

The interesting thing about tech though, especially in a handicapped economy where people begin looking for other ways to create or supplement income, is that tech is unique compared to other sectors in that it has the ability to rapidly create vast numbers of jobs and literally catalyze and cause direct change. While most of the recent focus in tech (driven by shortsighted VCs for the most part) has been with weak widgets, failed business models, and generic applications (copies of something else), change is coming.

The trends are moving towards
where the user is and what they are doing…everything is becoming locative, geospatial, contextual, etc. Even ubiquitous computing is starting to become a reality…rumors are flying about a new apple laptop that is basically two touch-sensitive screens…no keyboard! Other rumors indicate that Steve Jobs is already looking ahead to cramming everything we have in the IPhone and IPod now into the form factor of a watch. Intel is investing heavily in new smaller and more powerful chips that are designed specifically for mobile devices with low power requirements (they are announcing the dual-core version of their ATOM chip very soon). The list goes on and on (I’ve been watching these trends for a few years now, and they are all converging and maturing…right now!).

For us,
[note: I’m talking again about my startup] this represents a massive opportunity. Not only are we ahead of the curve in what we are thinking, but the thing we are attempting to develop has the potential to be monumental…the very backbone that ties all of these new mobile devices together, with interactive and immersive media that is directly personal and relevant to the user. Entire models change…no longer will things be one way consumption of media (website to person) for example. What we are building even has the potential to create entirely new professions (and as a result thousands and thousands of jobs). We are at the cusp of something amazing, but it will take a vast amount of work and tireless ambition to pull off.

Even if we aren’t the ones to do it, it is coming. The country needs something new, it needs innovation, it needs hope and belief, and it needs to be cultivated, facilitated, and enabled. I firmly believe that tech, as a whole, can contribute to the future of this country, but it is greatly hampered by the shortsighted VCs, the greedy big company CEOs, the corrupt politicians, and the get rich quick schemers. It is much more difficult to start something these days because of the lack of capital (particularly tech oriented seed), but this simply drives innovation into basements and garages…it may take longer to emerge, but it will.

So, I’m pretty excited about our country’s future. I think the short term road is going to be long and fraught with risk and obstacles, but I believe in the human spirit and this great country.

Getting back to the topic at hand, if some things tilt one way instead of the other, we will find ourselves on the brink of another great period of innovation, advancement, and tremendous change. Expect to see things over the next ten years that will dwarf the measure of change that the PC revolution brought us. The world is indeed changing, and we have the opportunity to be involved.

That’s what I think. I plan on being part of it and doing what I can to spark change, growth, and innovation myself.

* * *

My email continued on talking about my current startup and some other things you would probably find boring. I think what I am trying to communicate is that you shouldn’t be worried about the current economic turbulence, and that there is a lot of opportunity out there to be seized by the bold and daring.

I also think there is a huge shift occuring in the tech and media sectors. I’ll probably blog about this in my next post and expound on some of my comments here. 

Fear is the mind-killer (it will kill your portfolio as well). The spice must flow. Venture capitalists and investors must embrace risk and return their focus on creating wealth, new companies, and jobs. This is a good way to fast-track the recovery of our economy. Remember, you can dramatically mitigate risk in a startup, but you can’t dramatically increase the potential in an existing company. We also need to move away from widgets and “me too” companies, funding ventures with no real discernable business model, etc. Use your heads people.

Final points:

1) Don’t be greedy.

2) Build value, not widgets.

3) Business model before funding.

4) Don’t limit vision to silicon valley and wall street.

5) Don’t be afraid of innovation or risk.

6) Aspire, Create, Build, Grow.

The Perplexing Predicament of Pioneering

Being a pioneer and attempting to sail uncharted waters is not an easy thing by any means. There are many risks and obstacles that must be overcome all while flirting continuously with failure, disaster, and unexpected complications. The overall struggle is evenly split between the internal and external. Internally, a pioneer (or entrepreneur), must regularly wrestle with self-doubt, second-guessing, and finding balance between many things…life and work, doing work yourself or delegating, choosing one path over another, and so forth. Externally, the pioneer must fight unbelievers, naysayers, lack of vision, competitors, sharks, pirates, and even resistance from friends and allies.

History is studded with many examples of pioneers, inventors, explorers, scientists, and forward thinkers that have grasped, fought, clawed, wrestled, and sacrificed with great exertion of will and spirit to accomplish their goals. Columbus, Tesla, Edison, the Wright brothers…the list goes on and on.

I have had my own problems over the years, but most recently with our efforts with augmented reality. I think we have solved some huge problems and we know how to make it happen, but we continually have difficulties with explaining the technology to people (a common problem with any new or disruptive technology), or convincing people that it will work, there is a business model, people will use it, etc. If we don’t do it, someone else will. There are many trends in technology, mobile computing, data visualization, contextual and locative content, human-computer interface, cognitive computing, and so forth that are all driving toward the same thing (this is one aspect of the Singularity that everyone seems to be talking about these days).

But pioneering here is not without predicaments. Raising funds to actually develop and bring this technology to market is one example of many. Everyone recognizes the value of being first to market with something, but no one wants to take a risk on “unproven” technology until someone else has done it first. Of course at that point, the conversation becomes “soandso already does that, we don’t believe you can compete). Other comments we have heard are along the lines of:

“If this is so great, why isn’t Google doing it?”

“It isn’t possible that you are the only ones that figured it out…Microsoft is probably doing this right now”

“We are interested, but come back after you already have revenue and then we can discuss funding”

“We will fund you, but you need a new management team, the business model needs to be changed, and we need to rethink the product you want to build”

“If you aren’t based in Silicon Valley, there is no way you can build a successful company”

Again, the list goes on. Imagine if Columbus quit trying to get his boats, or Edison stopped bothering with light bulbs after the tenth failure, or if there were only six computers in the world, all serving up recipes in the kitchen. What if the Wright brothers kept selling bicycles because that was a “real” job.

When I think about how difficult it is for any entrepreneur or startup that has the ambition of changing the world, or a vision to create something new and wonderful, it really irritates me. You almost can’t get any traction unless you are fresh out of college, working on some facebook widget, biotech, or some web app that is sure to get acquired by someone else. What stuns me is the sheer number of “what the hell are they thinking” venture deals that keep getting done. I could rant about this alone for a long time, but that isn’t what I want to talk about today.

I tell people that I think innovation was stifled tremendously after the dot com crash. Venture capitalists are acting more like investment bankers now and there are very few funding sources that are willing to take the risk of funding innovation. Our country was built on innovation, big ideas, big risks, and a soul deep belief that anything is possible…if we but strive for it.

As Alan Kay said, “…Really smart people with reasonable funding can do just about anything.” I firmly believe this is true. There are no bright ideas without electricity and you can’t win a race without gas in the car. 

The venture community must rethink their current method of doing things. Mitigate your risk, but don’t be afraid of visionaries and innovators. Pair them up with experienced business builders and fund them well (never overfund!). Encourage, cultivate, guide, and mentor. The returns on your capital will be far greater than throwing money at some hair-brained social network widget thing with no discernable business model.

Nikola Tesla is quoted as saying “The present is theirs; the future, for which I really worked, is mine.”

This really sums up how I (and other pioneers) feel. Sure your shiny facebook widget or rehashed 1996 technology virtual world might be getting all the funding and attention now, but I am building for the future.

I refuse to give up. You should believe in yourself, your dreams, and your ideas as well. Be smart about how and what you do, but never let anyone choke your passion or cloud your vision. Keep your head in the clouds and your feet on the ground. Don’t wait for opportunity to come knocking…she is very shy. You need to chase after her unceasingly.

Go for it. Without risk, innovation, passion, and funding, the world will never change. We will never set foot on another planet, never cure cancer, never feed the world, never find renewable energy solutions, never evolve. Lack of risk and change is equal to stagnation, which ultimately leads to decay and death. 

Some quotes to ponder:

“There is no reason anyone would want a computer in their home.” — Ken Olson, Founder of Digital Equipment Corp (DEC)

“A rocket will never be able to leave the Earth’s atmosphere.” — New York Times

“Flight by machines heavier than air is unpractical (sic) and insignificant, if not utterly impossible.” - Simon Newcomb

“The cinema is little more than a fad. It’s canned drama. What audiences really want to see is flesh and blood on the stage.” -– Charlie Chaplin

“The world potential market for copying machines is 5000 at most.” — IBM

“I must confess that my imagination refuses to see any sort of submarine doing anything but suffocating its crew and floundering at sea.” — HG Wells

“Television won’t last. It’s a flash in the pan.” — Mary Somerville

and of course… “The world is flat.”

Three Moves Ahead...


I love to read and I’m always ready to recommend books to people. However, it is a rare occurrence that I come across a book or two that I insist and demand that you absolutely MUST read. No, I’m not going to lay out a really long argument why, or try to convince you. You should know me enough by now to accept my recommendation like this at face value. I’m not in the habit of throwing down the “must read” tag unless I really mean it and have good reason.

ThreeMovesAhead%20Cover_med.jpgSo, stop what you are doing and go order “Three Moves Ahead: What Chess Can Teach You About Business” by Bob Rice (no relation) right now. Drive to the bookstore or get it online, I don’t care. But get it and get it now. Especially if you are in startup mode working on your business plan and trying to raise capital. This is book is critical food for those trying to turn around a business, deal with competition, or break into new markets. Is your “web 2.0” company struggling because you *still* don’t have a business model? You need to read this.

I talk a lot about “light bulbs” going off when I either have an idea, or I read something and suddenly a thought or a feeling I have had suddenly crystallizes with sweet clarity. A-ha! There were a lot of moments like this for me when I was reading this book…things that I had been doing intuitively but unable to express tangibly were suddenly laid out in clear and logical detail.

Every chapter is loaded with insight and compared to chess strategy and philosophy with some great examples about the Grandmasters. Bob Rice is an engaging writer and personal in his style. I felt like I was sitting down with him in a cafe while he imparted his knowledge and expertise…both in business and in the Chess world. It is not often I (or anyone else for that matter) has opportunities like this, and it just underscores the value of the book.

Really, go get this book and read it. It will open your eyes and make you a much better entrepreneur, captain of industry, executive, employee, designer, engineer, and chess player. 

Robert Rice

Second Life Grid Trademark really annoys me

Apparently Linden Labs, the creators of Second Life, have gone out and filed a trademark on the word GRID. For you virtual world folks, the word implies a lot of things and is usually interchangable with a number of other cyberspace related words. Anyway, I don’t have a problem with LL getting a trademark on “Second Life Grid” which is usually how it is presented but to try to trademark the word grid by itself is pretty damned cheeky. Personally I find it offensive, insulting, and unfair. They might as well try to trademark cyberspace, web, network, polygon, avatar, pixel, link, and a few other generic terms that are common words, terms, and phrases used in the virtual worlds sector (which includes your standard virtual worlds, mmorpgs, and simulations).

I’m pretty disgusted with this.

I’m beginning to sense a bit of desperation from Linden Labs these days. Their CTO left recently, and their CEO has decided to “step down” in the near future. The media backlash against their unrelenting PR in late 2006 through 2007 (studded with misleading and disingenuous stats about their active users and subscribers) is continuing, and SL is handicapped by many problems that don’t seem to be going away anytime soon.

I think that Second Life would have died a long time ago, but for the fact that there is no clear competitor. Sure, there are places like there.com or whatever, but Second Life has bent over backwards to wrangle a lot of big name corporate sponsorships and virtual presences, and catered to the explorer and tinkerer types. Of course, there are a lot of virtual world experts, luminaries, entrepreneurs, and researchers that have found a home in Second Life. To be sure, SL has been valuable to a lot of people, and to some degree has validated virtual worlds in business, research, education, and online collaboration.

But I still think that the Emperor has no clothes, and the SL house is a house of cards that is very shakey. The first company that comes along with a better offering…more functionality, streamlined performance, better features, etc. will marginalize SL and dominate it, much in the way that World of Warcraft came out of no where and smacked down most of the MMORPG industry (not to worry, that gorilla is getting old and someone will knock them off their throne soon enough).

Anyway, I don’t want to get too far into an anti-SL rant here (at least not without doing it comprehensively and backing up my opinions), but their desire to trademark grid is crossing the line and just one more straw on the camel’s back.

 

 

Social Networks aren't really social...are they?

Social Networks are overrated. Most of them are pretty useless and a total waste of time. They are popular, sure, but why? I think the answer is more that they are a fad instead of something really useful and worthwhile.

On myspace, I used to get spammed with random people wanting to be my friend, because the number of “friends” you had was a measure of how cool or popular you were. These days, I keep getting spammed with friend invites from “hot” girls….look at their page and you can tell it was assembled moments before with the typical half naked picture and a plea to the reader to sign up on some other site because they are too busy to actually socialize on myspace…and if you give them your credit card number and subscribe they are willing to assume you are a normal person absolutely perfect to date and get to know better. No matter how many times I mark these scams as spam, I still get them. Thank you myspace. Why do I bother to keep my profile there anymore?

Facebook… instead of getting friend invite spam, I keep getting spammed with the latest facebook app of the day. I don’t even bother spending time declining these anymore. All these useless widgets and applications are utterly useless. Even if I did like them (I’ll admit to wasting time with warbook), there isn’t enough hours in the day to play with them all on any regular basis. I’d rather be playing real games over on kongregate.com or goofing off in some MMORPG or another.

And of course, there is a new social networking site every other day, and venture capitalists are just crazy about throwing millions of dollars at anything that remotely sounds like a social networking site…even if it is just like every other one out there. Now, here is the surprising thing…if you have traffic, you are likely to have an easy time of a venture capitalist throwing millions at you. But doesn’t this sound like the dot com crash? Who cares about business models and generating revenue? I have TRAFFIC! I have users! Yeah, I know the majority of them just make profiles and rarely come back (they are busy making profiles everywhere else), but just look at all these user accounts! These same venture capitalists won’t talk to dozens of other non-social networking ventures without a rock solid business plan, a business model from on high, and a team that doesn’t really need the capital to start with. [I’m sure this is going to piss off some VCs, but hey, I’m talking from experience here]. Social networks are one of the “flavors of the day”. But what happens at the end of the day? What if your Social Network is overshadowed by a new kid on the block? What if google DOESN’T want to acquire you (how many of you guys actually list this as your exit strategy?). You are dead in the water (is orkut.com still alive? for non-Brazillian and non-Indian users?) and millions are lost down the drain. This happens in other sectors too (how many MMO dev teams have scored millions for all the wrong reasons and ended up in the trash can, thus screwing it for the rest of us?), but I’m in the mood to pick on Social Networks right now.

Anyway, the obvious potential of social networking and their lovely websites is fairly obvious to any observer with half a brain. This is why these things got funded in the first place, but I don’t think that they are living up to expectation. Just because I have 350 “friends” on my buddy list does not mean that I socialize with them (at all) or that I am some sort of opinion leader, or that I feel like telling each and everyone of them about the latest product I bought or sway them in some other fashion. No, true social networks are the people you SOCIALIZE with. yeah, go figure.

I think that social networking (as website communities) have potential to be sure, but I don’t think anyone has done it right yet. Ok, sure shove the user metrics of accounts and traffic down my throat for all the big sites out there…I’m still not satisfied though. They could be much better. Maybe I’m alone in my bitter arrogance and high standards, but eh, so what. It’s my opinion. If you disagree, send me an invite to join your friends list. Then we will be great buddies right? Maybe someone can really monetize us for a change (and by that, I don’t mean spamming me with popup ads). 

EA does it *again*...layoffs at Mythic?

Uhm, wow.

Ok, so EA recently acquired Bioware and Pandemic from Elevation Venture Partners for about $800M. The currentCEO of EA (John Riccitiello) was one of the founders of Elevation Venture Partners, and formerly the EA President/COO.

EA will pay up to $620 million in cash to the stockholders of VG Holding Corp. (Elevation Venture Partners) and will issue up to an additional $155 million in equity to certain employees of VG Holding Corp.

Now, this obviously raised a lot of eyebrows for several reasons (wonder who really cashed out on this deal eh?).

EA has a terrible reputation of destroying studios after acquiring them, and an equally bad reputation in the MMORPG space. There were some doubts when EA acquired Mythic, but promises were made and the world generally had happy thoughts that EA/Mythic would deliver Warhammer Online and have a nice success.

Oddly enough, after the acquisition, EA tasked Mythic with giving good ole’ Ultima Online (over ten years old now!) a cosmetic facelift. Ok fine, but aren’t these guys already busy with a MMORPG project?

So, EA picks up two extremely well respected studios, and more promises are made…they won’t be dismantled, EA is looking for hot new original content, Bioware is rumored to be working on a sweet Star Wars MMORPG (even though Sony already slaughtered that franchise and Lucasarts annoyed lots of people with the crappy last three movies), etc. etc.

Ok, fine, maybe EA has turned over a new leaf since Riccitiello returned earlier this year. But oh no! Rumors are flying about EA laying off a lot of staff (many of them from Mythic), and relocating the Mythic team to Virginia. What the hell?

If they can’t afford to be paying staff and need to cut costs, why the hell did they just blow $620M in cash to acquire two studios (800 employees) and take on the long term financial burden of all that staff? Is EA losing confidence in Mythic/Warhammer? Is this in any way related to the recent beta delays for Warhammer?

What is going on at EA? Are they going to use the acquisition for some accounting trickery for the end of the quarter? I dunno…

I do know that if I was an employee at EA, I’d be damn nervous and I’d start farming my resume out. That company has been a house of cards for too long now, and it wouldn’t surprise me if their stock starts tanking relatively soon. Sure, maybe acquiring Bioware and Pandemic will inject enough new blood to influence and catalyze some change, but EA (and all of their studios) are notorious for burning out talent quickly and replacing it with inexperienced college grads they just farm out of “game design” programs at various Universities.

It seems that EA has been playing the “increase valuation through acquisition” game for a long time..new studios in multiple other countries (including China) have been launched in the last 24 months, and there is even a brand spanking new one here in Raleigh that will be working on a NASCAR title (cause, you know, North Carolina = NASCAR, so developers here would naturally be better at design…it’s a southern thing).

I’m giving EA a big thumbs down. Booo.

"If this is such a good idea...

Why aren’t the big companies doing it?”

This is, perhaps, one of the most frustrating questions that I have been asked by investors, venture capital funds, and colleagues/mentors kind enough to take some time to look at my business plans over the last decade and a half.

The mentality behind this question assumes that big companies are naturally successful, smart, and have both the will and the resources to continually push for bigger, better, faster. If the “big boys” aren’t doing something, than it probably isn’t worth doing…because of course, you have to assume that they already thought about your idea and have discarded it as unworthy.

Ok, this sounds like it makes sense, but it is a very weak assumption. Big companies are naturally slower than smaller ones, and usually bogged down in bureaucracy, policy, or conflicting interests. More often than not, it is simply easier (and cheaper) for a big company to sit back and wait for someone smaller to do something new and innovative, and then acquire them.

In the game industry, most of the “big companies” are either publishers that made a lot of money with a particular business model (put games in boxes on retail shelves) or they are other large media conglomerates that have bought into the industry through large publisher acquisitions. In both cases, these companies are very successful in their own rights, but are out of their depth when it comes to innovation or different business models. MMORPGs for example are still “new and mysterious” and not quite understood.

EA, arguably one of the most successful game publishers ever, has a horrible and dismal record with online games. They destroyed Origin after acquiring them and nearly destroyed Ultima Online as well. They have a long history of acquiring companies and then dismantling them. I’m not going to get into how they treat their employees or the terrible corporate culture they cultivate, and I’m not going to make a long list of all of the massive amounts of money wasted on funding projects and then canceling them at the last minute (remember battletech online?).

EA’s latest foray into MMORPGs (again) is through their acquisition of Mythic and Warhammer Online. Shortly after they acquired Mythic, they put the team to work on updating the graphics for Ultima Online and give it a facelift. WTF? I still don’t understand why you would divert a team working on a large project like Warhammer to spend time on a completely different game. This is just one example of the odd and backwards things that EA tends to do.

So why isn’t EA making multiple MMORPGs? Why is Sony picking up a lot of half-dead MMORPGs (cough, Vanguard, cough) and aggregating them instead of trying to innovate and push the industry forward? There are other companies, but I think I’m making my point.

The big companies “aren’t” doing X or Y because it simply hasn’t occured to them, or they are too focused on other things than hunting out every new opportunity. Or they are just sitting on the sidelines waiting to make an acquisition play. That is why our ideas are great and why the big companies aren’t doing the same thing.

Big does not equal smart or all-knowing.

Big is risk averse and will continue to do the same thing day after day because it is safe.

Small is where innovation and creativity occurs. Invest in small things, sell out to big things.

I’m not sure I feel like making a list of small ideas that challenged industry goliaths and found success. Anyone familiar with capitalism and industry in America can figure that out on their own. Just look at all of our inventors and scientists, or companies that revolutionized entire industries with a simple idea or process.

The next time you are looking at investing in a small team of people with an idea, don’t ask them “why aren’t the big guys doing this”, instead ask how they will execute and take their idea to market to knock the big guys off their horses, or at least make themselves a hot acquisition target.