While full-time tech jobs might not be making a roaring comeback, freelance and part-time work seems to be picking up the slack. One data point just came out today illustrating the shift to freelance and online work. Online outsourcer oDesk passed one million hours of work on its system for the first time in the month of August. A year ago, workers on oDesk were logging less than half of that, about 400,000 hours per month. Online hiring is up 129 percent since last year, compared to flat employment growth in the larger economy. The work on oDesk is spread across 215,000 employers and 720,000 contractors, whose desktops are monitored by oDesk's software. The top three job categories on oDesk are Web Programming, Web Design, and Blog & Article Writing. Cumulatively, employers have paid out more than $185 million to online workers through oDesk, up from the $100-million mark last October.

Launched at TechCrunch Disrupt NY a couple of months ago, VideoGenie is on a roll, says founder and CEO Justin Nassiri.

VideoGenie essentially aims to transform the way consumers and brands connect through video by making it super easy for marketers to collect, review and deploy unscripted video customer testimonials.

Since launching at Disrupt in New York, VideoGenie says it’s been on a tear, growing sales, building the team and optimizing the product offering. And now that its platform is being used by multiple early-adopting companies, the startup was kind enough to share some preliminary data with us.

Recently, the startup launched a new and improved video player to optimize their clients’ video playlists through a custom-built algorithm, and Nassiri tells us early results are stunning. Ecommerce site Swoopo is a client, and the companies have been working closely together to evaluate the effectiveness of the platform, and early metrics are indeed promising.

According to VideoGenie, the average viewer watches 9 different testimonials on the platform, which translates to over 100 seconds of video per company. Furthermore, every time a new video gets published, viewership increases by over 40 percent, which means people actually look out for new content. Finally, and perhaps most importantly, VideoGenie says campaigns results in over 32 times more videos viewed than identical ones being run on YouTube.

Also important for marketers: internal A/B tests have shown over 15 percent increase in brand perception for customers, VideoGenie says.

Based on the feedback at Disrupt, the company says it has “aggressively moved” into three new areas that define its new (VG2) platform. Some of those are already operational, while others are due for imminent release:

Playback targeting

Similarly to typical dynamic ad targeting, VideoGenie will use “what it knows” about the user to make sure the thumbnail and the first video are most likely to be clicked. The nature and degree of targeting is fully under the control of its clients.

If they use Facebook Connect, VideoGenie can first check if a site visitor has a friend on the social network who has submitted a video and serve that one up first. If not, VideGenie can look for other social, demographic and/or behavioral matches.

Playback optimization

Each video receives a so-called “VG Score” which is tied to the influence of both the person and the testimonial itself. It’s based on a composite of the submitter’s profile, testimonial quality, viewer acceptance, playback metrics, sharing dynamics and more.

Each testimonial is constantly recalibrated and served accordingly. The “VG Score” can also be extended to clients’ e-commerce analytics, allowing for tracking of influence in aiding consumers through the product selection and purchase process.

Social distribution

The next step is to distribute videos via social networks and social communications. Once a video is approved by its clients, VideoGenie will send submitters an email, in which he or she gets encouraged to alert their friends.

We’ve been hearing a lot of buzz around my6sense, a digital intuition iPhone app. The app imports RSS feeds and social streams, and senses what you like to read based on your own behavior, surfacing the most interesting content to you from your streams. And the Israeli-startup just recruited well-known tech blogger and consultant Louis Gray as its VP of marketing. Today, the startup is bringing its personalized content app to Android phones with a new app and is adding support for Google Buzz.

Once you sign in with your Twitter, Facebook, Buzz, and Google Reader accounts, my6sense will serve the content in your social streams in one interface. Using the company’s ‘digital intuition’ technology, the app will analyze which types of content and sources you click on the most and then auctomatically surface similar content as you interact with the app.

While the app will display a channel with the most relevant, personalized content from social streams, users can also see content from all sources (news, RSS, blogs and social streams), and filter streams based on social network and more. And users can share items directly from the app.

Gray compares the app to Amazon’s Recommendations engine, which also recommends books and more to you based on what you purchase. The difference, says Gray, is that my6sense focuses on your content and news choices, watching what items you skip in your social stream and what items you will read in full.

My6Sense, which has raised $2 million in funding, also offers an API, which allows a content owner to plug the startup’s digital intuition technology on their own sites, which will surface personalized content that users click on more often. For example, professional social network Ecademy has been using the technology.

Unfortunately, the app isn’t available on the web. And with the success of social news app Flipboard, the iPad poses a unique opportunity for my6sense as well. Gray says web and iPad apps are common requests by users and that the startup “won’t count any screen out” in future product development.

One of the big problems with video on the Web is that other than the title, description and some meta tags, it is mostly invisible to Google and other search engines. One way to make video more SEO-friendly is to add transcriptions, but that can get expensive. An angel-funded startup called SpeakerText is (re)launching today with a very clever way to automate the transcription process and attach the full transcript as part of the video player in a drop down window. You can see an example of how this works below. And if you publish a lot of videos and want to try it out yourself, we have 100 beta invites (use the code: techcrunch).

Once a video is transcribed, it appears in a collapsible window below each player. Not only is all the text visible to search engines, and thus should help drive more search traffic to individual videos, but the text is all time-stamped. So you can click on any sentence and it will jump to that point in the video. Anytime somebody cuts and pastes a portion of the transcript in a blog or other site, a link back to that point in the video is also included. The startup tried doing a Flash wrapper before for the YouTube player. It completely reworked its technology into what it is now calling the SpeakerBar that is more of a transcript plug-in that detects any video on your site that has a matching plug-in. SpeakerText works with video players from YouTube, Brightcove, and Blip.tv, and there is also a WordPress plug-in.

Below is a video explaining how it works, with a SpeakerBar underneath. Click on any sentence to jump to that party of the video.

SpeakerText uses a combination of speech-to-text software, natural language processing, and crowdsourced human labor to create each transcript. Video publishers submit videos they want transcribed. Using open source speech-to-text software called Sphinx-4 developed at Carnegie Mellon University (where co-founder Matt Swanson studied artificial intelligence), the videos get a rough first pass. (The other founders are CEO Matt Mireles and Tyler Kieft). These then get broken up into 5 to 8-second chunks, which are distributed to to human transcribers via Mechanical Turk.

The humans correct the text and punctuation in a digital assembly line, going through their micro-tasks quickly and efficiently. Different workers get ranked based on their work history, which helps in the assignment process. The transcribed video chunks are then pulled back together and reassembled into the complete video, with speech recognition software aligning the text to the video and adding time stamps. Natural language processing software is then used to determine where sentences begin and end, and to create meta tags for more SEO goodness.

This entire assembly line process is designed with feedback loops to get better and more automated over time. The service starts at $20 a month for the SpeakerBar, plus $2 per minute for the transcriptions. That is competitive with other transcription services, which seem to start at the $3 to $5 per minute range, but you also get the SpeakerBar. The lower SpeakerText can get their rates, the broader it’s appeal will be.

As Skype looks to build out revenue streams following its IPO, the company has been launching programs targeting enterprise customers. Last week, Skype launched Skype Connect, which is a way for business' employees to make domestic and international calls using regular office telephones. Today, Skype is unveiling its Skype Channel Partner Program that allows partners in the United States to sell endorsed IT support for Skype’s enterprise products.

The program will train Channel Partners in sales and marketing, customer tracking and reporting tools, as well as support and account management from Skype. Once trained and certified by Skype, Skype Channel Partners can provide their own consulting, installation, configuration, maintenance and support services to business customers who want to use Skype's business offerings, including the Skype Business Client, Skype Manager and Skype Connect.

According to the release, “Channel Partners will help businesses set up Skype and buy and use Skype products. For example, they will help Skype Manager customers use and manage the Skype Business Client on their desktop and mobile phones via business accounts or connect their existing private branch exchange (PBX) or Unified Communications (UC) systems to Skype using Skype Connect.”

While channel partners cannot resell Skype products to customers, partners can sell third-party hardware and software for use with Skype. Skype says that twenty VARs and system integrators have been enrolled in and trained as part of the Skype Channel Partner Program, including Atlanta-based Precedent Technologies. From the release, it’s unclear what the financial terms of these partnerships are, but we can assume Skype must be taking a cut somewhere.

As stated in the company’s IPO filing, Skype is looking for revenue channels and sees potential in enterprise use of the service. Training IT consultants as Skype evangelists and support staff is is one way to help expand use of this service. David Gurlé, VP and general manager of Skype for Business echoes this in the release, saying “Channel Partner Program will help us scale service and support for our business customers."

HDTVs are the next consumer electronic battlefield and Samsung is apparently testing out Android on its sets in order to step up their offering in response to the latest from Sony, Apple and others. Currently, Samsung is the world’s leader in HDTVs sold but there’s a shake-up looming and Samsung no doubt wants to retain its title. Android may or may not be the answer.

Startup incubators are popping up everywhere. Year One Labs is launching today as a “seed accelerator” in Montreal.

Similar to recently announced startup incubator AngelPad, Year One Labs was founded by four software entrepreneurs, Ben Yoskovitz, Raymond Luk, Alistair Croll and Ian Rae; with the hope of advising and funding Canadian startups based in Montreal.

Year One Labs is taking a hand-on approach to advising, focused on co-creating startups with entrepreneurs in the program. The program itself is dedicated to the “Lean Startup methodology,” which centralizes around the customer development process, validating the idea and market strategy before product development.

Besides advising and mentoring, accepted startups will receive $50,000, issued in tranches based on milestones in the development. Startups will also be able to rent space in Year One Labs for free. In exchange for this, Year One Labs takes a minority stake in startups, typically between 10 percent and 20 percent of equity.

It’s not every day we get to post about venture capital flowing to a Southern African company with global ambitions, but here goes:

FireID, a provider of security applications for mobile authentication, has secured 5 million euros (roughly $6.4 million) from Jersey-based early-stage investment firm 4Di Capital.

The funding will be used to expand worldwide distribution of the company’s mobile password authentication solution into key verticals, FireID says.

With FireID, users generate a one-time password via their mobile phone, even when offline, to access online banking, e-commerce websites, cloud-based applications and VPNs.

The core idea is that this eliminates the need for end-users to remember multiple passwords, to receive passwords via SMS or to carry any other authentication hardware e.g. tokens issued by banks for one-time-passwords.

Because no external sources are required to generate one-time passwords, chances for fraudsters to gain access to your Internet banking account, VPN network or favorite online shopping site are greatly reduced, the company posits.

Founded in 2006, FireID is located in Cape Town, South Africa, with offices in the US and UK.

Backupify, a cloud computing service that backs up data on other cloud computing services, has raised $4.5 Million in Series A funding co-led by Avalon Ventures and General Catalyst, with Lowercase Capital and First Round Capital participating in the round.

Founded in 2008 by Rob May, Backupify backs up all your data on services like Twitter, Facebook, Gmail, Flickr, WordPress, Blogger, and YouTube. The service keeps all the raw data for you and creates a downloadable PDF with, for instance, all your Tweets, direct messages, followers, people you follow, and profile info. Backupify offers free and premium versions of the service.

The company says that its offerings is gaining traction amongst enterprise customers who are looking to preserve data from social media outlets, and help backup data in the cloud. This latest round of funding will be used towards product development capabilities while expanding its focus on data management services that target the increasing amount of data that enterprises store in cloud-based applications.

Earlier this year, Backupify, which was launched last June, raised $900,000 in seed funding led by First Round Capital. Other investors included General Catalyst, Betaworks, as well as angel investors Chris Sacca, Jason Calacanis, Andy Swan, and Bob Saunders.

Digg founder Kevin Rose cheerfully responds to the mountains of criticism around the newly launched Digg 4. His overall theme is that users need to deal with it.

Rose says that he’s “gotta take risk” with the service in his quest to push it beyond the 30 million or so monthly visitors to the masses. He wants 20,000 – 30,000 diggs on the top stories v. the few hundred diggs that most top stories get today. To do that Digg is pushing stories that it thinks are more relevant to you, because people and entities you follow have pushed those stories, too. It’s a lot like Twitter, most say, and the soul of Digg is gone.

Rose also says he’s fine with people leaving. “If Reddit is your new home and it’s something you really enjoy I’m all for that,” he says.

He also talks about scaling issues, pointing out that Digg has at least 500 servers in its various data centers. All engineers are focused on making the site stable, he says, and they have no time to rebuild old popular features like upcoming stories. After that, though, he says upcoming stories is coming back soon.

We’ve embedded the show above, you can watch it on Revision3 here.

The never ending story between Apple Japan and the local government may have finally come to an end. Following months of disputes whether overheating first generation iPod nanos pose a security risk (some iPods caused fire) or not, Apple last month announced it will put up a special warning message on its Japanese company site and offer to replace batteries in all models affected for free.

Venture capital database VentureDeal this morning released complimentary VC Funding Quarterly reports, covering the second quarter of 2010. Let’s take a look at the report TechCrunch readers are likely most interested in: the world of the Web, digital media, software and ecommerce.

During Q2 2010, VentureDeal reports (PDF) that 366 companies raised a total of $2.1 billion in venture capital funding for those sectors, up 17% in total funding amount compared to the first quarter of this year and an increase of 30% in the number of companies funded.

All four sectors showed gains in funding amounts and number of companies funded.

Also see: Venture Capital Investing Up 34 Percent To $6.5 Billion In Q2 (from a MoneyTree Report from PricewaterhouseCoopers and the National Venture Capital Association).

Internet

Zooming in on the Internet sector, VentureDeal reports that the sector received $939 million in VC funding during the quarter, allocated among 170 companies – an increase of 33% in the
number of companies funded.

The big funding rounds were for Facebook and Groupon, which raised $120 million and $135 million, respectively.

Digital Media

Digital media companies (which VentureDeal defines as either video/casual game developers or advertising networks) showed increases in both total amounts funded and the number of companies funded, bucking the decreasing trend from the previous quarter. Total funding increased by 150% to $418 million, with 41 companies being funded, an increase of 17% versus the previous quarter.

We should note a single company accounted for over one third of that funding amount, though, notably social gaming giant Zynga. The company raised approximately $150 million from Softbank last June. We say they also raised over $100 million from Google, but the company still has to confirm that one.

Another big round went to New York-based Tremor Media, which scored $40 million in its fourth round of funding from a syndicate of VC firms and SAP Ventures.

eCommerce

The eCommerce sector continued its previous quarterly upward trend, with 11 companies receiving a total of $78 million in funding, an increase of 22% in financing amounts compared to Q1 2010.

Payment transfer company Xoom raised $33.25 million, while Kudzu Interactive secured $7 million in second-round funding.

Software

During the second quarter, software company fundings represented the second largest sector, raising $689 million between 144 companies, an increase of 2% in total funding amount
and an increase of 32% in the number of companies funded compared to Q1 2010.

The largest funding of the quarter was $90 million in series D financing for Palantir Technologies, which provides an analytical platform that helps organizations analyze “subtle connections that exist within vast networks of heterogenous information.”

San Mateo, California-based Blazent raised $10 million in new investment from a large syndicate of Silicon Valley venture capital firms.

AOL just announced an interesting partnership today: The Ellen DeGeneres Show. AOL and the show’s website, Ellentv.com, will now share promotion, traffic, and content.

For AOL, the deal helps the company leverage traffic from Ellen’s main demographic, women between the ages of 25-54. AOL will feature content from its network of sites on Ellentv.com. And sites in the the AOL Lifestyle and AOL Entertainment groups, such as KitchenDaily.com, AOL Television and Popeater, will carry Ellentv content and links.

Telepictures Productions, the producer of show, will continue to host, maintain and program the site. Videos from the show that are featured on the site will now also be distributed across the AOL video network/ Telepictures and AOL also plan to collaborate on editorial programming and digital sales packages on special events, seasonal, and holiday opportunities.

Clearly, AOL is riding on Ellen’s brand to help boost its own content offerings amongst the female demographic. And as Oprah’s show ends next year, Ellen could become the #1 talk show amongst this demographic. AOL’s making a big push towards its content strategy, so I’m sure we can expect similar deals in the future.

GSMA, the organizers of the annual, massive Mobile World Congress, have announced a couple of new developments this morning. For one, the organization is to expand the developer-focused programme at the event to include new elements such as Macworld Mobile and the Brand App Challenge. In addition, the organization has announced new speakers, including Sir Martin Sorrell, chief exec of WPP and HTC head honcho Peter Chou.

Facebook has come along way from being Mark Zuckerberg’s afterschool project. In fact “The Facebook Effect” author David Kirkpatrick implied at TechCrunch Disrupt that Facebook was so influential it should be governed by the United Nations, "They are too important to our culture to be left to a private corporation" he said.

But, despite the fact that at 500 million users Facebook has just under twice the population of the United States, it is a business not a country. And while Google is currently the most visited site on the Internet with about 170 million or so uniques in July, the levels of interaction that we have with Facebook are more often and more intimate, which makes it the most important site on the Internet today.

The amount of time we spend on Facebook underscores the fact that we no longer live in geopolitical countries but digital ones. And we often as citizens of  digital domains forget that the end game of  these platforms is "make money" which means that companies like Facebook must take steps to preserve business models based on lead generation and the monetization of user data, and that those steps are often against users’ best interests, literally.

The conversion of profile interests into pages was one of these steps, and there are and will be countless other infringments as long as Facebook has a monopoly on social networking activities, especially in conjunction with the recently launched Facebook Places. Inevitably a business needs to survive, but should we as users set limits to what can be sacrificed for this survival? What controls do we have over any advancements towards data openness, especially those which we don’t necessarily have the technical background to understand? Do we have a right to a Facebook Bill Of Rights?

While Facebook has a somewhat neglected governance page, its own abandoned Bill Of Rights and even something called "Principles,” users still do not yet have an inalienable say in the company's machinations. So, pulling from many of the complaint emails sent to TechCrunch as well as heeding to the recommendations put forth by organizations such as the EFF and the ACLU as well as countless blogger entreaties, we've come up with the following hypothetical list of  "rights,” our ultimate goal being the empowerment and education of users.

10) No Privacy “Bait And Switch” Facebook said for years that all information that users made private would always be private. Then it made names, photos, friend lists and other information unavoidably public. So “No bait and switch” is essentially “Don’t change privacy settings to be more open without prior user consent.”

9) Opt In, Not Opt Out "Opt In" needs to be the default for everything privacy related. Any Facebook default should never move users toward less privacy. The ‘wizard’ Facebook walked FB users through in December, where the default got swapped to ‘everyone’ is perhaps the most egregious example of lack of transparency. From now on no more December 2009,  i.e. all moves that force data sharing need to reveal exactly what the company intends to do with that data and the default answer better be “not very much.”

8) Freedom Of Data Export Users should have the freedom to share their data with anyone they want and take it with them anywhere they want, including removing it from the Facebook Service. While Facebook has alluded to eventually enabling this functionality in the past, there is currently no way  to export Facebook data, which means whatever happens on Facebook stays on Facebook to the ultimate detriment of users.

7) The Right To Permanently Delete Accounts At the moment the actualities of being able to do this are lost in the vagaries of activating and/or deactivating your account, which still gives Facebook the rights to your personal data and license to your IP. Facebook needs to provide a direct link to this and then make sure that when your profile is gone it’s actually gone, and not stuck in server limbo somewhere.

6) The Right To Data Security Facebook needs more transparency regarding how code is deployed, and needs to make the process more secure. We get the occasional emails about how Facebook has sent messages to the wrong people, exposing user email addresses and various sundry data holes. While all code has its flaws, Facebook needs to keep in good faith that its first priority is protecting user data from malware such as phishing schemes, for example.

5) The Right To Redress Regarding Suspending Accounts We also receive many tips from people who have had their accounts suspended and have no way to reach an actual person vs. an autoreply at Facebook. Seeing as though your Facebook account is now your online calling card, there needs to be a way to argue your case to an actual human being.

4) The Right To Clear Outlines of Privacy Changes Google recently simplified their privacy policy in the wake of an $8.5 million privacy settlement over Buzz. So while it might inhibit innovation to create one thing and never change it without somehow breaking your word, perhaps Facebook can continue to offer up a streamlined one sheet record of everything it’s changed privacy wise, and keep it current with all new product related updates and caveats.

3) The Right To Information On Third Party Sharing Facebook needs to explicitly lay out what it does with your user data and how it target ads exactly. The importance of this has increased in the wake of Place’s introduction, especially since the proposed business plan for many of the geolocational platforms including Facebook is selling user checkin data.

2) The Right To Opt Out Of Facebook Marketing This could be achieved with premium accounts, as Pandora does now, giving people a clear way to opt out of any kind of ad targeting or marketing. The ads would still be there, but they wouldn’t directly pull from your likes, giving you a greater sense of “privacy.”

1) The Right To Protections From Snooping Facebook Employees A guarantee of security around who has access to user data and how often it has been abused. While “scary” media reports that Facebook has a  “master password” abound and pranks like "Fax this photo" are cute, they lead us to believe that Facebook employees do not quite yet grasp the fact that with great power comes great responsibility.

Facebook is a private company that people opt in to use. In this sense, the situation is not analogous to a government document like the Bill of Rights, as that document is meant to define national law i.e. “I didn’t choose to be an American citizen, so I sure as hell want laws guaranteeing my rights as a citizen.” But Facebook has a de-facto monopoly on social networking and so it is nation-like, hence the above call to action.

Which in turn raises David Kirkpatrick's larger question on whether or not Facebook needs more governmental regulation. Well, if you’ve got the ACLU and the EFF chasing after you every time you  announce a product development, then it might be time to listen and voluntarily enable at least some of these proposed measures before regulation catches up, because it will, sooner or later.

This has been one of the more interesting stories to track down. We got word over the weekend that Yahoo is in the process of moving large numbers of engineering jobs within the YOS group to Bangalore. Yahoo PR mostly denies this.

This includes YDN (Yahoo Developer Network, the platform for third party apps to be installed on the Yahoo home page) for the most part. And Yahoo confirms that some California based YDN engineers are being moved to other projects, calling it a “pretty minor internal shift of resources.” But at least two senior engineers were fired outright, we heard (we’re holding the names until Yahoo confirms or denies that).

The YOS (Yahoo Open Strategy) group, run by SVP Jay Rossiter, includes YDN as well as other products aimed at developers like YCW and YQL. The idea, a few years ago, was to counter Facebook platform. Only problem is the third party developers never showed up to the party.

Some of the writing has been on the wall, even in a sea of continued Yahoo defections. Neal Sample, Yahoo’s VP Social Platforms, left earlier this summer. And Cody Simms, previously Head of the Yahoo Developer Network, took a new job at Yahoo outside of Rossiter’s group.

We’re going to try to nail Yahoo down on an actual statement tomorrow.

It looks like we’re not the only ones doing some crazy things with our logo tonight. Google’s latest logo doodle is currently setting the web on fire — or driving people insane, depending on what you read.

Sure, it’s nothing new for Google to change its logo, but today’s variation is particularly interesting because it’s in motion. Dozens of dots or balls makes up the standard blue, red, yellow, and green logo today. When you first load up Google.com, these dots are scattered all over the place but quickly fall into the Google logo. But when you move your mouse anywhere near this logo, the dots freak out and jump all over the page.

The posting about the logo on Hacker News states that it’s using an HTML/JavaScript particle simulator. Further, one comment notes that “the particles are divs styled with border-radius and position:absolute.”

A few other interesting notes:

• If you move the browser window around, the balls also move. These movements are based on the direction you move the window.
• If you have a custom background installed on your Google homepage, you’ll see a blue-red-yellow-green grid of dots next to the Google logo — clicking on this will take you to the regular white Google homepage where you’ll see the dots in action.
• When you click back to the Google.com after being away, the dots recognize that.

A number of people are noting they can’t see the logo, so you should try visiting the U.S. or British versions of Google to see it.

Sean Percival also made the video below of the logo in action.

As for what the logo means, that’s still is up in the air. Some think it’s a way for Google to show you if your browser is out of date. Others think it’s some sort of birthday logo (Google was incorporated on September 4, 1998, but their exact birthday varies).

Last week we changed the TechCrunch logo for a day to salute Twitter – specifically the first crazy Twitter logo with no vowels. And we had so much fun doing it that we decided to keep doing it. Starting today and for the next 50 days we’ll change our logo every day to high five some interesting or important startup. And there will be a few surprises too.

If you miss one you’ll be able to see the archives on this page, and we’ve also added a link to the top of TechCrunch so people will know what’s going on. And yes, we’ve allocated a few slots to sponsored logos as well, you can see details on that information page.

Thanks to Audrey Fukuman for creating these logos.

First up is Facebook, which seems fitting since we are now firmly in the Age of Facebook. Who’s tomorrow? Come back in 24 hours and see for yourself!

This is a guest post by Mark Suster, a 2x entrepreneur who has gone to the Dark Side of VC. He started his first company in 1999 and was headquartered in London, leaving in 2005 and selling to a publicly traded French services company. He founded his second company in Palo Alto in 2005 and sold this company to Salesforce.com, becoming VP of Product Management. He joined GRP Partners in 2007 as a General Partner focusing on early-stage technology companies. Read more about Suster at Bothsidesofthetable and on Twitter at @msuster.

I’ve had a post in my head for months – maybe longer – about the role of a CEO. My primary role was “chief psychologist” and as I’ve learned over the past few years the same has been true as a VC. Both are basically people businesses.

I finally got around to writing it having read Fred Wilson’s post about what a CEO does. He says it basically comes down to three key functions:

• Sets the overall vision and strategy of the company and communicates it to all stakeholders
• Recruits, hires, and retains the very best talent for the company.
• Makes sure there is always enough cash in the bank.

Matt Blumberg, who runs one of Fred’s portfolio companies, Return Path, follows up with an additional three:

• Don’t be a bottleneck (make sure you aren’t holding up people’s work)
• Run great meetings (don’t be a productivity drain on the company)
• Stay fresh (be mentally and physically fit & attuned to what is going on in the world)

And I’d add to the world of “lists of three” the old adage that many VCs quote about boards having only three roles:

• Raising money
• Selling the company
• Hiring & Firing the CEO

These are good starting points and one day I’d like to elaborate more on the topic of running a company and as only I can do I will take these short lists and make them much longer ;-)

But today I’m going to do the opposite. I’d like to boil down the role to just one critical function: chief psychologist.

1. Psychologist as the CEO of Employees – Everybody wants to work somewhere “that is not political” but that place only exists in a mythical utopian island. Even three person organizations are political. Not when you first start but if you’ve been at it for 2 years or more you’ll know what I mean.

Almost by definition to be a great leader you need to be an effective psychologist. If you want to grow you, as Fred’s post points out, need to be able to attract & retain the very best talent. Some entrepreneurs make the mistake of never devolving power. They are control freaks and have to own all of the decisions. This breaks Matt’s rule about not being a bottleneck. This is the failure of many early-stage companies when they try to scale.

And the opposite is also true. Leaders who trust people too easily and get divorced from the details are almost always failures. It’s a paradox: control too much and you constrain growth, control too little and your quality lapses.

Anybody who has worked with me knows that I have these “control freak” tendencies as I think many leaders do. We want quality, we trust our own instincts & judgments and we think that many people don’t live up to our standards. But we know that ultimately being effective is about finding those people that do. It often takes a while of experimentation and watching their results to start to trust them. But when they start to meet and exceed your expectations it’s magic. You’re suddenly free to focus your energies elsewhere.

Once you’ve been around for a few years, attracted some great people, landed real, paying customers and raised venture capital you’ve likely got a talented team around you. Almost definitionally very talented people will butt heads. It’s your job to give people enough space to flourish without conflict, resolve conflicts when they do occur, encourage your team members to perform at their best and set the culture by which they ultimately treat their colleagues and staff.

My first company was founded in Ireland, headquartered in England and had country operations in the UK, France & Germany. Due to the language and culture issues in Europe we opted for a country structure with an MD in each country and local sales, marketing & customers support staff. We obviously had the debate about whether these functions could be centralized but either strategy has its trade-offs.

This is akin in the US to having sales staff in NY, SF & LA with your HQ in one of these locations.

As each country grew it obviously vied for centralized resources: finances (to fund people development & marketing), technology development (they wanted to show their largest customers that they were willing to build in critical features or integrations required to win big deals) and also they wanted my time – out in the field and with their biggest customers.

As things got bigger we hired a head of European sales and a head of European marketing. In your case this might simply be a VP of Sales or Customer Support for multiple locations. Naturally the countries reacted negatively to reporting to a centralized figure in the UK (and of course to no longer reporting to the CEO).

I found that a lot of my time went into spending time with the country MD’s to show them that they were still important to me and that I was still willing to help with sales campaigns. Equally I had to spend time with the heads of sales & marketing to keep them confident I wasn’t going to undermine their authority in the country operations.

But it wasn’t just about company structures. If one sales guy had a banner year he wanted to know why the other sales guy wasn’t pulling his weight. He wanted more resources allocated to him and he would begin wondering whether he might rise in the organization. If any of you have built larger organizations I’m sure these types of issues will resonate.

Lots of requests for “just 20 minutes of my time.”

To try and overcome many of these issues we held all company meetings twice / year where we paid for EVERY employee (executive assistants, customer support staff, interns) in the company to come to a central location for a day-and-a-half of team building & fun. Keeping things together was a function of re-energizing everybody: reminding them that they were important, reacquainting them with their colleagues and making sure that they felt part of something bigger / more important.

As virtually anybody in our company will tell you I was the last person to leave almost all of these events. Not because I had to prove I was a party animal (although there was that) but mostly because I wanted everybody to have their private 20 minutes to tell me what was going on in their jobs, lives, careers.

I’m sure this mostly played the role of catharsis but I did remember almost every individual story and in my own way would try to make things just a little bit better in some small way over time. It would surprise anybody who has never been a CEO the specificity and sometimes simplicity of the grievances:

• We haven’t gotten a new office printer in 3 years, I really can’t take it any more
• Their office pays for their coffee and ours doesn’t. It doesn’t seem fair
• I don’t understand why she gets all of the best accounts. How can I hit my quota selling to Deutsche Bahn – their sales cycles are so slow!

But this isn’t restricted to distributed teams, multi-country environments or even large companies. We faced it when we were small.

I had developers who thought that the chief architect was a bottleneck – having to be involved in every decision. Our most talented developer wanted to move to the US for personal reasons. We kept him on a remote role – by far the best decision we could make.

The funny thing about a startup is that if you keep it together for several years life happens along the way. We went through marriages, divorces, babies, deaths of close family members and even deeper issues like alcoholism. Along the way it was my job to play the role of sympathetic counsel, mediator or bad guy depending on the situation.

It is such an under-discussed issue as we spend our time in startups mostly talking about products, marketing and fund raising. And business schools seem to also over emphasize the quantitative skills over the human ones. I guess the latter is harder to teach but I believe a bigger driver of success.

If you want to attract world class talent you have to be inspirational, persuasive and persistent (the best people always have other offers). If you want to retain the best talent you have to be able to devolve power, coach people for performance, resolve conflicts, find ways to create growth opportunities, balance carrot / stick motivational techniques, etc.

And if you want to really be an effectively leader you need to know when & how to get rid of under-performers or bad seeds. One of the most common “chief psychologist” asks of me as the CEO was to resolve an inter-personal conflict with another employee. You can’t fudge these types of situations – you are often forced over time to pick sides. And I’ll tell anybody who asks (or doesn’t) that I’d rather hire somebody with 90% of the skills and a great attitude than a bad seed with more talent.

2. Chief Psychologist As a VC – I am surprised by the extent to which my role as a VC has continued this “chief psychologist” trajectory. I’ve often said that being a CEO is one of the loneliest jobs that there is because you always feel the need to be self-confident and make sure others don’t sense any self doubt. You’d love to tell your employees that you’re going through tough times / decisions but you don’t want it to affect them.

You want to be able to tell your VCs that you’re nervous your market will be limited but you’re worried that might affect your next funding round (or your job!).

So you internalize much as a CEO, which is why groups like YPO are so important for super successful entrepreneurs.

As a VC you see the insides of companies rather than the companies positive spin on TechCrunch. I spoke to a VC recently who said, “if only my company was going as well as the Wall Street Journal says they are.” That is not uncommon.

I have been involved as an investor in many CEO / founder disputes including many that are not in my portfolio. I’ve had to sit with founders and talk to them about how we need to hire more senior staff as the company is growing and that person is not necessarily able to fill the new role we as a company need. I’ve been involved in helping CEOs who are having disputes with investors and want to figure out how to resolve them.

I had one of these “chief psychologist” moments last week with one of my favorite young entrepreneurs. His firm hasn’t yet performed up to the level at which he expected. I opened up with a very blunt conversation about self confidence, self doubt, family pressure, peer pressure and the demands on a CEO. I *think* he found the conversation relieving and confirming.

I’m no savant for being able to know his issues of the mind – I’ve been there. Lived it. And as a VC, mentor, angel investor and founder of Launchpad LA I live it as a routine of my life. I had the CEO of a prominent site in 2006 come to me near tears about how she couldn’t take the stress of running her company any more. I helped keep her calm and we focused on other possible outcomes (we eventually got the company sold for more than $7 million and she owned half of it).

Another prominent CEO was on the verge of both company & personal bankruptcy when we had lunch. He and his family had guaranteed a personal loan on the company.

I think one of my most important roles a VC is that of chief psychologist. I know it doesn’t sound glamourous but since the development of a company is such a roller coaster ride I believe that the best VCs understand the need to help counsel people – to be their best motivators. Sometimes this is heat. Sometimes this is light. But not paying attention to the human element in company performance is being oblivious.

Oracle has confirmed that former Hewlett-Packard CEO Mark Hurd has found a cushy place to land after one of the year’s messiest tech scandals. Hurd will be joining the company as Co-President alongside Oracle CEO and close friend Larry Ellison.

This comes as no surprise if you believed yesterday’s rumors of Hurd’s hire or took note of the fact that Ellison came to his defense during the controversy over allegations of harassment by former HP contractor Jodie Fisher.

According to The New York Times, Ellison chastised HP for firing Hurd last month, calling it "the worst personnel decision since the idiots on the Apple board fired Steve Jobs many years ago."

Mark Hurd wrapped up five years at HP last August and during his tenure the company’s stock price had more than doubled. Hurd was compensated generously for his accomplishments, pulling a $24.2 million in salary at HP in 2009.

He now has the unique opportunity to use what he learned at HP to maximize Oracle’s acquisition of Sun Microsystems, one of H.P.'s direct competitors.

Says Ellison, "Mark did a brilliant job at H.P., and I expect he'll do even better at Oracle. There is no executive in the I.T. world with more relevant experience than Mark."

Hurd will be replacing Oracle Co-President Charles Phillips, who was coincidentally on the receiving end of another sex scandal earlier this year.

I’ve ignored more press releases in my time than I care to remember, but I still scan, and sometimes even read, a bunch of them every single day. Comes with the territory, and I’ve long accepted that – I’m sure a lot of PR folks think of those as necessary evil almost as much as we do. Almost.

But as boring as it is to read the same frickin words over and over and over and over again, there are certain times – albeit very, very few – where we manage to distill some actual useful information from the writings (but please, again, stop using words like “leading” and “award-winning” in the first paragraph all the time. Pretty please?).

And then there the rare ones that put a smile on our face. Press releases we actually enjoy reading. Not because they’re ballsy (it’s easy to provoke and get attention by running your virtual mouth) but because they’re whimsy and just the right degree of ballsy, rather.

Take for example this one announcing the launch of MeetYourFriends, some social network (posted in full below for your reading pleasure). It has everything: a headline that draws just the right amount of attention, the basic information and mostly lots of self- and industry mocking humor. Bonus points for distributing the press release on Labor Day.

Will MeetYourFriends ever stand out of the social networking crop? Almost certainly, they don’t even stand a chance. But they’ve already gotten my attention by penning a better, more memorable and attention-grabbing press release than most other companies throughout their entire existence, so that’s gotta count for something. Or something.

Update: actually, maybe you should think twice before signing up. I can’t in any way guarantee this isn’t a clever ploy (yet another?) to get gullible users to provide the makers with their personal data. Update 2: just don’t sign up, it’s better for everyone.

Either way, enjoy the read.

Latest Social Network MeetYourFriends.com Threatens to Bury Rivals ‘Within Days’

NEW YORK, Sept. 6 /PRNewswire/ — After resolving not to come up with a pretentious name and an avalanche of gimmicks, social network MeetYourFriends.com goes live to a celebration of simplicity and retro fanfare. Having not just received first round equity funding of $50 million from leading venture capitalists, the site is well set to tap into the growing market of 30- and 40-somethings who just want to talk to each other.

Developed by Neil Bryant, one of the founders of Badoo.com, MeetYourFriends will not be launched in a private beta for only a select 500 users. When visitors come to the site they will immediately find they are not immersed in a stunning 3D multi-verse, where they can interact with each other via fully customizable avatars. “It’s going to be beautiful,” says Neil, who is not going to give an overhyped, media-crazed keynote speech.

MeetYourFriends claim to have identified an emerging demographic of users who, according to Neil, are “keen to engage each other in casual chat” and are aggressively aligning their service portfolio to meet this demand. “We wanted to bring some fresh new ideas into the social networking sphere, and with a unique combination of email and live chat we think we may have just achieved that.”

For those who wish to bring up goats and cows on a virtual farm, MeetYourFriends will not satisfy. The site is a back-to-basics social network that will appeal to fans of The Beatles and sliced bread.

There’s no open API so game developers around the globe are not frantically hacking code together, right this minute, in order to launch the latest virtual pets and aquariums across the network. “We are extremely excited at the thought of all the products that will soon not be appearing on the site, contributing to the users’ rich enjoyment of the service,” says Neil.

Following the predicted growth in mobile Location Based Services such as FourSquare and Gowalla, MeetYourFriends gets in the mix through a revolutionary static PC interface, pinpointing the exact location of the user to their computer. “We think it’s important that our users can access the site whenever they are at a PC. We’re looking at a version for Notebooks right now, but it’s some way off,” says Neil.

To calm fears before they arrive, MeetYourFriends will not change its privacy policy or allow advertising once it’s settled on its laurels. “We think Facebook is nervous,” adds Neil. Global domination awaits.

ABOUT MEETYOURFRIENDS

MeetYourFriends.com is a back-to-basics social network that brings together new friends from across the globe. With simple sign-up and fast search, the website offers instant friendship using Direct Messages and Live Chat. Based on secure and powerful web technology, the social community brings the world to your front door for chat, fun, and friendship. Find out more at www.MeetYourFriends.com.

We're not going to lie to you—this video may feature the world's worst Skype connection. And that was after 45 minutes of trouble-shooting. While we have no problems connecting to entrepreneurs in Russia or Kenya, apparently London is the land that Skype forgot, which is pretty ironic given it was funded there.

But such old-world telecom connections are the new reality for Monty Munford who moved from uber-telecom connected India back to the UK last month. Munford has worked in two if the industries where India has outdone many other countries: Mobile and Bollywood. (See him above getting pampered.)

As we discussed a few weeks ago with mobile in Kenya – and as Munford wrote in his guest post on Somaliland yesterday – India is one of many countries trying to export what it has done well to Africa. Is Bollywood the model?

In this clip we talk about what India did well with Bollywood. It's an interesting lesson for any emerging market looking to build more than a copy cat industry, but something that can be a true global sensation.

We’d heard this was a great discussion but haven’t been able to get our hands on the footage until now. On July 29th senior corporate development executives from Cisco (Derek Idemoto), Facebook (Michael Brown), Google (Amin Zoufonoun), Microsoft (Fritz Lanman), Twitter (Jessica Verilli) and Yahoo (Taylor Barada) convened at Startup2Startup to talk about what kinds of companies they want to buy, and why.

The panel was moderated by CODE Advisors founder Michael Marquez, who was also a former corp dev executive at both Yahoo and CBS. He put together a panel of buyers that will represent most or all of the M&A activity in the online space over the next year or so, with the possible exception of AOL.

My favorite part is at 27:30 where each panelist says the top acquisitions that the person to their right should make. Watch everyone’s body language – lots of nervousness up there on stage. But the entire hour is worth watching if you’re even thinking about selling your company right now.

• 10:54 – Mike Brown gives some insights into high level strategy of Facebook
• 11:51 – Fritz Lanman talks about why Microsoft hasn't been as active as its peers (although that will be changing)
• 13:33 – Fritz hits on the highlights of a typical M&A process
• 20:45 – "Speed Round", all panelists comment on the areas they believe are most overhyped or underhyped
• 22:23 – "Speed Round", all panelists comment on the best under the radar company
• 27:30 – "Role Playing" – Mike asks the panelist to speculate on the top acquisition choices for others on the panel
• 32:56 – Taylor answers how a company can best interact with Yahoo!
• 35:30 – Amin gives advice on how to best survive the Corporate Development process
• 39:50 – Fritz (and all other panelist) comment on the Corporate Development "bidding" process
• 52:07 – Panelists talk about M&A learning lessons from "failed" M&A
• 57:38 – Closing words of advice from each panelist

I’ve got to admit, the concept of “branded content” on the Web makes me cringe. It is generally used to refer to Web videos created and packaged specifically for an advertiser. Maybe I am old-fashioned, but I like my videos created for the audience first, not advertisers. And yet, in the budding Web video industry, branded content is bringing in some serious dollars and even some serious talent.

There is a lot more going on here than advertisers bankrolling the production of their own videos because there isn’t enough professionally produced Web video to show their ads against (although that is part of it). The rise of advertiser-produced video entertainment is but a sign of a much larger shift that is happening as people consume more video on the Web. Advertisers love broadcast and cable TV because of its massive reach into every home. They are finding it nearly impossible to replicate that reach on the Web. The only way they can do it is by spreading ads across tens of thousand of sites through video ad networks.

Many of those video ad networks also create their own content for their own sites, but some are also starting to become broader video distribution networks as well. One of the biggest video ad networks that specializes in creating branded content is Digital Broadcasting Group (DBG). Last week, I met with COO Rick Kleczkowski, who told me about a few of the Web video shows DBG is producing, including the upcoming ControlTV, Built Green, and Family Versus Chef. We also got into a spirited discussion about why branded content seems to be taking over the Web, and whether or not that is a good thing. I ask him if guys like him are going to put guys like me out of business (see videos below).

DBG is one of the top 10 video ad networks in the U.S., with a potential reach of 167 million viewers (comScore), but the sweet spot of its business is producing Web TV shows with specific advertisers in mind, and then distributing it through its network of sites where they play in editorial slots rather than as in ad slots off to the side of the page. Some of these shows actually sound kind of interesting.

ControlTV will be directed by Seth Green, the guy behind the Robot Chicken animations on Adult Swim. An actor in his 20s will be the main character and the audience on the Web will be able to control his every move for 18 hours a day. It’s so We Live In Public, you kind of expect someone like Josh Harris to be behind it, not a video ad network. Whether or not it turns out to be compelling entertainment will depend on execution, but I can see the appeal. It will be shown on its own dedicated site, and DBG has already lined up Sprint and Ford to be sponsors (the main character will drive a Ford Fiesta and carry around a Sprint HTC EVO phone).

The other shows are Built Green and Family Versus Chef. Built Green will be a construction project and home renovation show focusing on green materials. It will be sponsored by Kohler, the faucet company. Family Versus Chef will be a cook-off show where a professional chef is paired against a home cook, and the judges have to rate each meal without knowing who prepared what.

I could imagine these last two on TV just as easily as on the Web. But if they were on TV, they would be created by producers at HGTV or the Food Network, not the advertisers themselves. The advertisers would just come along for the ride once the shows found an audience or because it fits thematically with their brand message. The difference is that TV can pretty much guarantee a minimum number of viewers no matter how bad the show.

On the Web, there are no TV networks. The new power brokers in video, other than YouTube and Hulu, are the video ad networks—companies such as Tremor and Break, and DBG. Advertisers like the video ad networks better because they give them more control over where their ads are placed. And if they can have shows created for them on spec, so much the better. They are more than happy to pay premium rates.

But will this produce good TV? (Do not doubt that sooner or later all TV will move online). Part of this is just early days, when advertisers can essentially have shows created for them just like at the dawn of the TV era. Eventually, though, new networks and talent will rise, creating TV with the Web in mind first. TV that looks great on your tablet computer and your flat screen TV.

Audiences can sniff out when branded messages are being pushed down their throats and will gravitate towards the good stuff. Smart advertisers and advertising companies already realize that and will separate the content creation part for the packaging and distribution part, and we will be back to where we are today with TV networks. The church and state between creative and money will be restored. But the TV networks will look completely different. These companies we see as nothing more than video ad networks could very well become the TV networks of tomorrow.

In the first video below, Kleczkowski describes the concepts behind some of DBG’s “branded content” shows. In the second, we talk about the rise of branded content and why it is happening. (Sorry for the audio quality, the video was taken on my iPhone in a loud New York City cafe).

Watching the battle of words, blog posts, term sheets and Tweets unfold over the last few weeks between VCs and Super Angels has been a little surreal. I’ve spent a career convincing editors that the internal workings of Venture Capital are more interesting than they sound, but even I can’t muster the passion to declare convertible debt AWESOME while equity TOTALLY SUCKS.

Clearly, this cultural explosion of tension is about more than just terms and who does what deal. After all, in theory, both these group need each other to thrive.

Rather than commission yet another guest post on the subject, we figured let’s just invite Super Angel rabble-rouser David McClure and early stage VC defender David Hornik into the studio for a no-holds-barred Smackdown. This is a five-part series tackling five wedge issues of the debate, and we’ll post one every day this week– consider it a primer on what you missed if you took August off, Mr. Old School VC.

Today’s topic: Why the hate? Don’t you two need each other?

As always when Dave McClure is involved, the language is NSFW. There, you’ve been warned.