Rodrigo A. Sepúlveda Schulz

RSS #016: Meet Olivier Ezratty, independant advisor to startups [French]

A different perspective on today's show: let me introduce you to Olivier Ezratty, an icon of the French tech industry, currently on a sabbatical year, after 15 years with Microsoft France, including 3 as Director of Marketing and 4 years as head of the Developers and Platform Group, supporting all major software vendors in the country.

Although trained as an engineer from Ecole Centrale, I can tell you Olivier is a fantastic marketeer and salesman: I remember seeing him on stage many years ago (1998?) at a trade fair at the Palais des Congrès in Paris, selling WindowsNT and Visual Basic to over 2,000 people in the audience!

In this episode we had a chat about how technology can help entrepreneurs: of course, Olivier pointed to how it applies to marketing, comparing what is possible today with the Internet and all the new web 2.0 tools such as blogs, vlogs, postcasts, etc. vs. how he did marketing 10 years ago: to him it is more efficient, more ubiquitous, more transparent and offers more targeted marketing. Indeed. I would argue that there are so many other areas as well, including collaborative work, offshoring, and countless new business possibilites, but we didn't have time to touch on that.

What we did talk about however involved some of the technology areas Olivier is looking into with more detail these days: he started his own home theater 8 years ago, way before it became mainstream (emulating I guess BillG's dream house or maybe he was a pioneer in what he thought would be the way of the future?). Inspired by that experiment, a lot of what he is looking into these days involves digital photography, video on demand,... in a word, multimedia convergence. Why ? Because he believes that a lof in this area will be powered by software (Microsoft has a play of course with the Media Center Edition of Windows), by third-party software, by services companies, etc. Indeed, multimedia is changing our every day lives, just consider what the iPod has done: bringing audio, photo and now video to the masses on the go.

Among the things that Olivier is doing in his sabbatical is actually some free-lance consulting with other software vendors, helping them from the inside with their marketing strategy, their product strategy, and planning for international operations, indeed something he learned on the job over the years at Microsoft.

I asked him what main differences he saw between being an employee of a large corporation and being independant these days (a proxy I believe for his potential upcoming entrepreneurial life ;); no surprise here: of course Olivier mentionned freedom, risk-taking, creativity, enthusiasm, and less contraints (except for the funding issue many start-ups face). My guess is that this man will not go back easily to MSFT...

This interview was shot last monday in Paris, during a conference where Bill Gates himself came to talk to French software vendors, entrepreneurs and VCs. He didn't say much, except repeating software probably 3 dozen times. I didn't take any pictures but captured part of his speech in audio format on my Nokia phone, and I have to say that SOFTWARE is indeed his favourite word ;) the conference itself felt a bit like receiving a head of state, very formal, instead of an opportunity of talking candidly with one of the guys who shapes the future of technology. I would have loved to have him interact with the room on mobile telephony, set top boxes, PVRs, web services, web 2.0 features, embedded software, etc.

The highlight of the round table was definitively Bernard Charlès (he guy has his own domain name ;), CEO of Dassault Systèmes, who almost waited for BillG to come on stage before demo-ing himself his latest acquisition: Virtools (sold to him by Eric Huet - see RSS #14). And many of my friends and contacts in the entrepreneurial and VC world were there. We had great and very quick chats. Fun!

RSS #015: Meet Frédéric Humbert, GP at Innovacom [French]

It’s been a few days without vpodcasting: sorry about that: I’ve been super busy, to the point that I had to take some time off today and go by the sea for a few hours in Deauville in Normandy with the family, just to get into a different environment, away from my keyboard. I actually went on the beach with my camera and got some nice footage of “les planches” and the beach, of dogs running around, kids playing with sand castles and boys flying kites.

Now back to our usual stuff: venture capital and entrepreneurs. Today, I bring you a great guy that is rather soft spoken, and will not say much unless you ask him specifically. Some VCs actually share this state of mind: they are totally focused on listening to you, instead of putting their point of view forward.

In this episode, Frédéric walks us through one key elements of the venture capital cycle (exits), talks about his involvement in the launch of Kelkoo, and on why he still works as a VC:

Frédéric is a partner, or GP (general partner) as we call them in the industry, with Innovacom, a VC fund affiliated with France Télécom.

What does that mean ? Innovacom is currenlty investing its 6th fund (120m euros), conveniently called Innovacom 5 (no typo ), and shares 50% of the equity of the management firm with France Telecom, and has some of FT’s money invested in the fund.

If you don’t know it yet, in the venture capital world, professional investors meet up (the GPs) and raise funds from other people, the Limited Partners (or LPs). That means that the GPs will charge management fees to the LPs for managing their money, and will share a percentage of the capital gains of their deals. LPs commit their money usually for 8–10 years. GPs then organize their investment cycles so that they invest the money in the first few years of the fund, and try to exit before the end of the fund, ie between 5–8 years.

This means, that a liquidity preference (or a “forced exit”) is definitively a clause that VCs will put in their term sheet. Why? Because their business model is that they have to return money to their LPs in a timeframe that is already approved. Aspiring entrepreneurs should keep this is mind, and need to understand the constraints of the VCs. Frédéric was a very early investor and board member in Kelkoo (at seed stage), sold last year for 475m euros to Yahoo! in 100% cash: his fund made a 13x investment on his first investment, and 5x overall (meaning that he invested also in later rounds, called follow-ups). He says that although working with Kelkoo was a fantastic human experience, this was not a jackpot, because he felt that Kelkoo had a lot of industrial potential still (the company is generating over 100m euros in turnover) but :

1) as described above, investors have to exit contractually at some point;

2) competing against Internet giants such as YHOO, MSFT or GOOG requires a very strong financial situation. A trade sell here seemed the best option, although the Kelbook by Julien Codorniou and Cyrille de Lasteyrie recount that the choice with exiting with an IPO was very close.

He also tells us how he found the deal very early on (another trick of VCs: they tend to establish very large deal recruitment networks): it was brought to them by a sister business in the France Telecom group, the Voilà portal that had spotted this shopbot technology from Grenoble. Together with Michel Dahan from Banexi (read the book for all the details), they went out to recruit Pierre Chappaz (now Entrepreneur in Residence at Index Ventures in Geneva), the then Director for Marketing for Western Europe at IBM, and went on a roller coaster. Frédéric acknowledges in this case that the team was a key success factor for the company, but the original reason why he invested, because there were just 5 people starting the company.

On why he keeps doing this job, Frédéric replies that he loves meeting lots of people, and participating from the inside in the creation of great stories (I would second that as well). Indeed, Innovacom has funded over 350 ventures so far, and the guys there do have some great experience in managing growth and coaching / supporting entrepreneurs.

His next thing? video games. Geez… I need to start playing games then, instead of just producing and watching videos

PS: Frédéric has another secret hobby: he collects images from the early days of rugby at http://www.rugby-pioneers.com.

VOD stalled at Netflix

Seems the studios are not playing ball with Netflix on VOD, and that ther Netflix-TiVo deal is near RIP. Check Reed Hastings call on audio here and all the details here. So what does this mean for European VOD players ?

(via Om Malik)

The video iPod effect

Not to self: interesting. In episode #17,  the Dudes at Diggnation started encoding their podcasts to be compatible with the video iPod (h.264 format) since episode #16. Video editions have been available since episode #1. They say in this episode that for the first time the number of subscribers to their video show is greater than the number of subs to their audio show.

Clearly the first data point from the field on the impact of the iPod video on grassroots media.

Now playing: digg.com - Episode #0017 - October 20, 2005

 

Planning your web 2.0 infrastructure

Fascinating article over at I, Cringely about the thinking required to build a global large-scale infrastructure. There was a video at some point on Google that showed that they had 100,000 servers in 20 data centers (anyone has the link? I think it was a CBS show).

In this example, he talks about a free service such as gmail offering 4 GB to the 200m internet users in the USA. He goes on to calculate the number of disks required, the space it would take up in a data center, the amount of energy spent, etc.

Although this calculation is a bit rough, try to imagine what it would cost anyone offering a video sharing service with 10GB of storage/user (hey only about 15 divx movies…). You need to factor in therefore larger disks, streaming servers, bandwidth + peering, more users around the world, etc.

I really like his last section:

“ This is the kind of planning and provisioning required to support FREE services. Add pictures and especially video and the total data storage requirements go up by another two orders of magnitude, much of that supposedly still supported by ads.

That's a heck of a lot of ads.

My point here is that we're entering another period of Internet exuberance. Yes, a lot has changed since 1999, but it's amazing how many of the ideas being pushed are the SAME ideas, just empowered now by dark fiber, cheap broadband, and six years of Moore's Law. And this time I think it will actually work and the Internet will change even more than it has the ways we live and work. But it isn't going to come easy and it isn't going to come cheap.”

Now playing: Adam Curry - Daily Source Code for Thursday October 27th 2005 #268

Update: waow, just a few hours after posting this, I stumbled on this note by Typepad's founders explaining their recent availability issues. Indeed, running a web service still required heavy telco and sysadmin skills. Adam Curry is hiring like crazy on his shows (listen to the Jobcasts) for his infrastructure.

Alternatives to the A-list online RSS reader: Bloglines

 Interesting discussion going on at Russell Beattie’s blog about what to use to read your RSS feeds. Mac users swear by NetNewsWire (just bought by NewsGator!), whereas the rest of us are starting to suffer from Bloglines: posts disapearring, or not showing up fast enough, including a list of other stuff that Russ points to.

The comments are interesting, and Bloglines’ CEO Mark Fletcher posted an adequate response on that he was focusing on scalability more than new features.

Alternatives that people are offering include: searchfox (neat video there), Findory, feedOnFeeds.com, Newsgator Online, Temboz.com, FeedLounge.com, LiteFeeds.com, NewsIsFree.com, Rojo…

What about you ? What are you using ?

New iPod video to be announced in January

It’s described in this post on Futuremedia news. Hey… That’s exactly why I got the smaller version of the iPod video, betting that a new one would come out in just a few months (as all iPods have been updated regularly in the past).

Now playing: Taylor Barcroft - 10.23.05 CBS MarketWatch Weekend - Bambi Francisco discourages anyone from buying an iPod. Alexis Christoforous intro-outtro.

Video blogging is going mainstream

Waow, it's been a very intense past fortnight in videoblogging:

• video-sharing platform YouTube raised 5m$ from Sequoia earlier this month (everyone interested in this space was talking about it at ETRE in Athens)
• Videoegg announced a couple of days ago that they are signing a deal with Typepad to bring video casting to bloggers, although they still have to iron out a few things. Audio interview here on VentureVoice. Their original cool stuff (USP) was webcam capture, drag & drop support, and support for many video devices.
• well, Dailymotion announced the next day that they were integrating with Typepad and Blogger and they announced webcam support a few weeks ago.
• everyone forgot to mention that castpost has been doing blog interfacing for many months now, including to Typepad.
• or that vobbo has been offering the webcam service for many months as well.

So... Where's the news ? That someone read the API of Typepad ? That support for all video formats and  live capture from webcams or drag & drop support is one of the key value propositions of Macromedia's latest flash software (out of the box)... ?
It can of course also be made to work with other stuff, and I'm not trying to diminish the efforts that each team has put in their service.

I was wondering about the business model of all these players a while ago, and now I am wondering as well about the investor's approach to these companies. There are business models of course for vloggers and vlogging platforms: advertising, subscription, per use, per click, per account, per storage, etc. But hey... Unclear to me how each is going to become a global player with significant revenues from what I'm seeing in the marketplace.

Not to mention of course the gazillion other copycats of online video-sharing available out there. Let's just note that Podemus, a French startup, was put in the spotlight recently by our friend Loic Le Meur; and Revver that showed up on my feed aggregator yesterday: similar to videoegg, but they help you earn money by submitting your videos to them. Oh... Scoopt.com does that as well! Complicated marketplace indeed.

In the meantime, professional bloggers should have a look at Eric Rice's audioblog. He's quietly been building a tool that professionals are picking up (commandN.tv for example), and translating his infrastructure in Chinese, Japanese, Korean... Well done Eric! And at least for his service you have to pay to use it (after the 7day trial period) every month.

I had a nice meeting with my friends Jean-Michel Billaut and Malo Girod de l'Ain (FilmFestivals.com) this week, and used part of the time we had together to show them some of the stuff I've been working on with my partner Ivan and our team in Paris and Madrid. Indeed, Jean-Michel asked for my permission to blog PART of what he saw and what we discussed about.

By now, I guess you've understood that I consider video-sharing almost as a commodity in terms of business model, and although many guys out there have been pioneers and are offering great tools (I encourage you to use them), I decided to rebuild my own tool that enables *me* to upload of course any format, that allows me to capture any webcam feed, that posts directly to Typepad, that doesn't have issues with MPEG2 formats (one of my cameras actually produces exactly that format :(, that enables downloadable backup files, that doesn't have the 30sec, 2 minute or 100Mb limitation, etc. (all of it working great on one of our development servers at http://vpod.tv <= no it's not my brand, just one of our many deposed domain names).  Hey... If I can do it, then the next guy can do it, no barrier to entry here, hence I wouldn't bet my business on it.

Now, the real stuff we're working on hasn't been disclosed yet, and we don't expect to until it works great, offers real value to customers, and sustains a very significant competitive advantage in the global marketplace. As many things in life, the future for our stuff is yet unclear. We believe strongly in it, we feel we have the right execution capabilities for it, and that we will succeed.

In the meantime, back to work.

Update: Eric Rice has a comment about the new videoegg/typepad deal. Interesting.
Update2: Russ has 2 great posts about the ambtion and business models.
Update3; and Andrew has the perfect tool to create a web 2.0 business.
UPdate4: Russ had actually a series of posts on how videopostcasting is hoing to be huge, is posting vpod scripts, and talks about hooking up his ipod video to a friend's TV.

Stanford University publishes material on iTunes

Good initiative. We all know that MIT had many courses available on line. Now Stanford is offering some on line as well, but through the iTunes interface. Link.

(via Laurent)

RSS #014: Meet Eric Huet, GP at Ventech [French]

The man can indeed smile quite a bit.

Trained as a Dr. in Philosophy, Eric has has a good yer. He is one of the 5 investors at Ventech, a French venture capital firm with about 170 million euros under management.

The first fund started in 1999 is now positive with a number of great exits this year:
- his first investment, Calendra, was sold to BMC software earlier this year
- his second investment, Musiwave, was sold to Openwave the other day (for a 10 to 12x, depending on the earnout)
- Virtools was sold to Dassault Systèmes earlier this summer.

His other portfolio companies include for example Wstore that shows 90 million euros in the top line, and Eric says there might be very good news coming out shortly; others also include B-process, an e-billing company dealing with over 2 millions invoices per month (recent contracts include 17m invoices at Carrefour/year, 8m invoices at American Express / Havas voyages per year, etc.).

I asked him what his best memories were at one of his companies, and he chose to talk about Musiwave. Clearly, he said, the best thing was working 1:1 with the entrepreneur, Gilles Babinet (labeled here as a great guy who knows how to listen, who has a great vision and who executes). For many years, they were just the 2 of them at the Board, and instead of 'having tea' they dealt with issues and pushed them through. The worst memories he said, were the others: his own people, the market, other investors. Indeed the company was launched just after the bubble 1.0 burst, and the company was not making money. They redid the business plan many many times.

I asked him also why should entrepreneurs work with him: well, he says he's been in the software industry for over 12 years, including stints at Business Objects, Natsystems, usw. His difference as a VC ? He sees through paperware strategies, and he definitively knows how to talk to the chief executive of a company: straight talk.

I guess Gilles will not disagree, and although I'm told they had many tough discussions, they've become great friends.