Prior to the public announcement on Friday, Intel was kept in the dark with regards to Nokia's plans to relegate MeeGo to a glorified R&D project, sources with knowledge of the situation tell TechCrunch Europe. The U.S. chip maker, it appears, was caught off guard as were many media outlets and analysts - this publication aside - with the news that Nokia has forged a long term partnership with Microsoft that will see the handset maker adopt Windows Phone as its primary smartphone platform. Intel, which along with Nokia is developing the MeeGo operating system, is said to be extremely concerned now that Nokia will inevitably reduce its engineering commitment, which it desperately needs, and where this leaves plans to get its Atom chip into smartphones and other mobile devices. We've also learned that Nokia's first MeeGo device, originally scheduled to be announced late last year, has been sent back to the drawing board by operators.

Editor’s note: This guest post was written by Kris Duggan, CEO and founder of Badgeville, which launched at TechCrunch Disrupt San Francisco in September 2010. Prior to founding Badgeville, Duggan held positions at Socialtext and WebEx.

I was honored to have been selected to launch my social rewards and analytics company, Badgeville, this past September at TechCrunch Disrupt. Badgeville made it to the final round of the Startup Battlefield and won the Audience Choice Award. As a result of our success at TechCrunch, we’ve had the opportunity and good fortune of selling over $1 million in Web-based software, securing 25 clients with 1 billion monthly page views, raising $2.5 million in series A funding, and growing our team from five to 20 people with three offices around the world.

In the first 30 days following Disrupt, our website received 20,000 visitors, often with over 1,000 visitors per day. We were impressed and, at times, overwhelmed by the amount of qualified leads we received as a direct result of the publicity spurred by the event.

Since then, when I first meet an entrepreneur, they are frequently interested in the key factors that contributed to Badgeville’s successful launch. I thought it might be helpful for others to consider our story when evaluating their options when it comes to introducing their companies to the world.

Launch – What Went Well:

#1 Practice makes perfect (or close to it)

They say that bad speakers think about themselves during a presentation, good speakers think about the content, and the best speakers think about their audience. The evolution from bad to great begins with comfort and practice.

The number of practice opportunities Heather and the team provided to us—at a few VC offices about a month before the event, and then even at the conference hall the week before—were critical to gaining the skills required to deliver a successful presentation. It makes an immeasurable difference when you can see how different people react to your message and what they suggest you remove or reinforce. Each of the companies had only 6 minutes to present, including time for a live demo, making every second critical when trying to communicate your story. My co-founder Wedge Martin and I practiced our presentation over 100 times. We presented to all our friends and family and tried to perform it as if we were in front of thousands of live people and tens of thousands of streaming participants. In the end, we became comfortable with the content and could begin to focus on the audience.

#2 – Our messaging connected with our target market

When we started thinking about Badgeville, we knew that there was a great need for a new kind of engagement on the web, but it took a while to come up with the right messaging for the business. Since our social loyalty program was going to include points, badges, and trophies, our initial messaging went something like "add game mechanics to your site."

What we realized, after talking to hundreds of web managers, marketing managers, brand managers and other potential customers, is that "game mechanics" alone is not the right message. It's only part of the message. The umbrella messaging about social loyalty, which is the heart of our company, is much larger than that, and our messaging needed to clearly represent the bigger picture of engagement.

After a few more revisions and research cycles, we came up with better messaging that resonated with our target audience. It started out by framing Badgeville as “a modern loyalty platform for mobile and web publishers to increase engagement with their audience.” Then we mentioned the “proven techniques from social gaming” that we fold into the mix.

The key learning here is that you must carefully craft your messaging at launch. I've seen lots of really cool technology startups miss the mark because their messaging doesn't clearly resonate. Note: the messaging can evolve after launch, of course, but it's important to have a clear message that resonates with your audience from the start.

#3 – As a B2B company, you have to launch with signed, paying customers

During our customer development and discovery efforts over the summer, we were fortunate enough to sign up a great collection of initial customers. In order to show proof of the traction for our business onstage, we were able to share that we had $500,000 in bookings prior to launch with major brands such as Comcast Sports, Philly.com, The Next Web, Black Book Media, and others. Some found our level of transparency about our company financials unique and interesting for such a young company. The judges (Kevin Rose, Ron Conway, Marissa Mayer, and others) appreciated that we were able to show clear evidence of a market and proof that our product is desired by customers. Their feedback and input was invaluable.

Here is a sample of the comments we received during the panel:

"I love it. It's got all the buzz words… it's social, it's check-in, badging, game mechanics…"
– Don Dodge, Google

"The market opportunity is real and Badgeville is off to a great start."
– Roelof Botha, Sequoia Capital

"[The analytics piece is] thoughtful."
– Marissa Mayer, Google

"It's pretty impressive when your revenues are double your start-up capital."
- Ron Conway, angel investor

"I love it, it's like Foursquare for the web!”
– Kevin Rose, Digg

I believe that our revenue, customers, and traction were the factors that propelled us into the next stage of the contest. We were no longer just a good idea, we were on our way to becoming a business.

Launch – What Didn't Work So Well

#1 – Make sure you can take advantage of the demand you create

We had gotten all the way to Disrupt with our customers and our product, a lean team of 5, and only $250,000 in seed capital, which made us the least-funded startup vying for the title of TechCrunch Disrupt Winner.

In the following three months after the conference, we received over 2,500 leads through our website. Many were people downloading our whitepaper and many were contacting us directly for more information.

However, we didn't have the team in place to deal with that influx of interest. For some companies, it might mean turning on a self-service option. For us, we were very focused on making sure we could take on specific projects with clients where we felt we could really leverage our platform. As a result, everyone in the company spoke with prospective clients in order to see where we thought the best fit was.

Interestingly enough, we hadn't formulated a formal pricing structure at time of launch. Much of our initial selling activities post-launch focused on creating an optimal plan for our customers and our company. Since then, we’ve added a few measures to alleviate this strain; we’ve added more sales people now in the Western region, the Eastern region (we opened a NY office), and in Europe (Amsterdam office). We also added sales focus specifically on the media and entertainment vertical.

#2 – Getting the product ready for prime time

We launched with a couple of key deployments of our software platform in place. However, we know there is a huge potential to enhance our product over the coming year. Today, we estimate our product is only about 10% complete. We are going to great lengths to make our widgets as flexible and configurable as possible, deeper into the host of social game mechanics we make available in our platform, and even deeper still into the analytics side of how we identify and segment user loyalty across our client communities.

There is a balance I imagine between getting it perfect, and launching and iterating. We've also learned a lot from talking with clients about capabilities they value, and we never would have had this volume of data and input without having launched.

#3 – Are we ready for capital?

Several VCs and angel investors approached us during the event with a variety of enticing and exciting proposals. It is very alluring to get that much follow up and interest after all of your hard work.

Our belief was that we weren't ready to take capital at our launch; we hadn't even formulated a real operating plan. We spent a few months post-launch getting to know investors we could really trust and made sure they understood the kind of company we are trying to build. Having options generated from the conference helped us practice and even make some mistakes in financing. In the end, we were able to solidify some great support from both angel (thank you Maynard Webb, Joe Lonsdale, Zain Khan, Pejman Nozad, and others) and institutional investors (thank you Trinity Ventures, El Dorado Ventures).

Without Disrupt, we absolutely would not have hit key milestones in the accelerated timeframe that we have been able to achieve. While we had some initial customer traction, Disrupt solidified that for us and proved to be an amazing and uniquely distinct launching opportunity. In terms of recruiting, we've been able to grow to a total of 20 people on our team over the last few months because of our traction. In terms of access to capital, this traction also meant we were able to secure our funding.

Thank you Mike, Heather, Erick, and the rest of the TC team. We would not be where we are today without the opportunities you have provided us. And congrats to Qwiki the actual winner of Disrupt SF 2010 who recently announced a large institutional round of investment after unveiling their killer product at Disrupt!

You’ve held out for months, waiting and watching the market for some sign of a tablet that you think you’d like. But maybe you’re asking the wrong question. Instead of “Which tablet should I buy?” maybe you should be asking why you need a tablet in the first place?

We’ve written out a brief guide to deciding whether you need a tablet at all. As for a recommendation, the two devices we can unequivocally recommend right now are the iPad and, if you’re into Android, the Galaxy Tab (although there is some talk of an upgrade coming soon). However, don’t buy right now. The iPad 2 is on its way and the Xoom, Playbook, and TouchPad, are coming soon as well.

So before you break out the credit card, let’s talk about a few reasons to buy a tablet… and a few reasons not to.

1. Tablets make great e-readers. Although many would complain that the reading experience isn’t nearly as focused as single-purpose e-ink devices, and the text isn’t as legible, these drawbacks haven’t stopped users from cracking open PDFs, comics, long web articles, and so on tablets. Plus kids books are fun in full color, something Kindle can’t yet beat.

2. Tablets are portable productivity stations. There’s nothing like a calendar and an email window on a big screen. Although many of our phones now run PIM applications, the real estate afforded by a tablet makes for a far superior experience.

3. Tablets are better than older laptops. If you don’t need to type a lot, tablets will handle more content than a two-year-old laptop, and there are more modern apps and games.

4. Tablets are great for meetings. While you should probably paying attention during meetings, tablets are a great way to take notes unobtrusively and, when things get boring, play Angry Birds on mute.

5. Tablets are great for sharing photos and 1-on-1 presentations. Tablets are excellent for a communal photo sharing experience and are a boon for insurance adjusters, real estate folks, and salespeople. Having everything in front of you in cool little device sure beats firing up a laptop and running a presentation.

6. Tablets are great for movies and music. There’s nothing better in the car for kids than a copy of Cars or Dora on an iPad. Our kids love it and a tablet costs a bit less than installing soon-to-be-obsolete DVD-powered LCDs in the headrest. I also enjoy taking the iPad on a plane for movies, a job that used to go to the iPod Touch.

7. Tablets are cheaper than a new laptop. Your old coffee table laptop died and you’re thinking about a new netbook. Don’t bother. Tablets, as we said before, are on par or more powerful than a standard ~$500 laptop.

8. Tablets don’t crash. Or at least when they do crash it’s not a big deal. A quick restart is is all it takes to get them back on track.

9. Tablets are good for travel. Tablets usually work with Wi-Fi and 3G networks and the large screen and storage space is great for maps, guides, and dictionaries. Think of your tablet as a Hitchhiker’s Guide To The Galaxy.

10. Tablets are just cool. They make you feel like you’re from the future.

---

And now, Five Reasons Tablets Aren’t Ready

1. Are tablets as portable as the phone you already have? You can stick your phone in your pocket and never know it’s there, but can you do the same with an iPad or TouchPad? I don’t think so, unless your name happens to be Baggin’ Saggin’ Barry. Is carrying an extra bag to holster your tablet the end of the world? Clearly not, no, but don’t try to tell me it’s as portable as my handy little Android (or whatever) phone when it’s patently not.

2. Where are the games? And by games I don’t mean things like Angry Birds, with all due respect to our fine feathered friends. Will I be able to play 64-play multi-player in Battlefield with a tablet? Will I be able to waste hundreds of hours playing World of Warcraft? What about Crysis 2? Tablets may have their place in the world, but playing real games to the fullest will always require a discrete GPU-backed PC.

3. How much work can you do on one of these things? Do they run Photoshop? How long will it take to render video? My guess is that my desktop PC, with its overclocked (to 4.0GHz) quad-core processor and hundreds of gigabytes of free space, will be able to render a video 800 times in succession before a tablet can render a video just once.

4. "You can browse the Web with a tablet while watching TV on your couch! And movies look great on them!" All fair points, but I can already browse the Web on my couch with my battle-tested laptop, so why get another device to do the same thing? That doesn’t make much sense, does it? As for movies, well, I prefer watching them on with a proper setup—Blu-ray player, big screen TV, surround sound, the works—as opposed to watching them cramped on a train, or even hunched over in bed.

5. Something better will come along in a few months. Remember when netbooks were all the rage a couple of years ago? The future of computing, and so forth. You barely see them mentioned anymore, and that’s because tablets are the new soup du jour. In four years we’ll all be writing "Remember tablets?" articles, lamenting having spent all that money on a silly piece of transitionary technology.

With Devin Coldewey and Nicholas Deleon

Many foreign-born techies in the U.S. and abroad are pinning their entrepreneurial hopes on the passage of a bill, sponsored by Senators John Kerry (D-Mass.) and Richard Lugar (R-Ind.), to create a startup visa. Tech-industry notables such as Paul Graham, Eric Ries, Brad Feld, Fred Wilson, and David McClure have lobbied for this. I, too, lent this my support. In fact, I have been advocating such a visa since 2007—when my team's research revealed that 52% of Silicon Valley's startups from 1995 to 2005 were founded by immigrants. We also learned that a million skilled workers and their families were stuck in "immigration limbo" and that many were beginning to return home—causing America's first brain drain.

But, as I wrote in my Bloomberg BusinessWeek column, I fear that the Kerry-Lugar bill will get approved—with overwhelming support from both parties. Our leaders will declare victory and claim that they have made the U.S. more competitive. This will not, however, produce the expected startup activity; it won't give our economy the boost it desperately needs.  That's because the bill is far too limited. And, given the divisive nature of the current political debates about immigration, this may be the only immigration bill that gets passed until way after the next elections—by when it will be too late.

Let me explain the issues and suggest some solutions.

The Startup Visa Act grants a temporary work visa to any foreign-born entrepreneur who is able to obtain an investment of least $100,000 from a venture capitalist or a qualified "super angel" investor in an equity financing of not less than $250,000. To gain permanent residency, the entrepreneur must create five new U.S. jobs within two years, raise more than $1 million in venture capital, or generate sales of more than $1 million annually.

The bill makes the wrong assumption that all startups raise angel or venture capital. As my team’s research has shown, nine out of 10 successful entrepreneurs don’t. Kauffman Foundation’s analysis of the Inc. 500 list of the fastest-growing private companies showed that the vast majority (84 percent) of these companies hadn’t raised any venture capital. And the economics of starting a tech company have changed. Before, it cost hundreds of thousands, if not millions, of dollars to build a software product. Now, first versions of sophisticated, game-changing technologies such as Facebook, Twitter, and Groupon can be built within weeks or months—for tens of thousands of dollars. Startups need venture capital only when they are ready to scale, which is usually two to three years after they have perfected their technology and their business model.

The Startup Visa Act requires foreign entrepreneurs to go begging to super angels and VCs—whether they need their money or not. And regular angel investors aren't good enough; these must be "super angels": U.S. citizens who have made at least two equity investments of at least $50,000 every year for the previous three years.  Even one of the Valley's most notable and successful investors, Jeff Clavier, doesn't qualify as a "super angel", because he is not a U.S. citizen.

Now think about this: do we want the same investors who are negotiating valuations and other terms with fledgling entrepreneurs to also have the power to make life-changing decisions about whether they can live in the United States? Investors already have too much power over the entrepreneur, and they can be cutthroat in negotiations; I wouldn't want them to also have power over my life and my family if I were in this situation.

A better model is the Startup Chile program (to which I am an advisor). The only criteria for being admitted to Chile and gaining a $40,000 grant are quality of talent and commitment of the founding team members; international market potential of the project; and the value of the applicant's affiliated networks that will be injected into the Chilean entrepreneurship ecosystem. It isn't rocket science; we could easily develop similar criteria for use in the U.S.

As everyone in the tech world knows, VCs and angels have a herd mentality in investments. When location-based services are the next big thing, the investors fund dozens of Foursquare clones; when coupons are hot, the money goes to Groupon clones; when question-and-answer websites are in vogue, the zillions of Quoras get all the attention. What about an entrepreneur in France who wants to come to the U.S. to build a revolutionary new technology that these investors haven't yet gotten excited about; or an Indian entrepreneur looking to develop a new water-purification system for the developing world? They are out of luck.

One way to fix the Kerry–Lugar bill is to remove the requirement for super angels and VCs to be the decision makers, and to lower the investment threshold to $100,000. That is still a high bar, but not enough to keep out determined entrepreneurs. To prevent abuse, anyone on a startup visa should be precluded from working for any employer other than the startup itself—so that there is no chance of their "taking American jobs away" as the misguided anti-immigrant groups say foreigners do.

But maybe we don't even need this legislation. There may be a simpler fix.

Silicon Valley-based immigration attorney Malcolm Goeschl says that Congress can just spell out what factors should and should not be taken into consideration by the immigration department (USCIS) in adjudicating all employment-based petitions. As Goeschl explains, a sponsoring company’s size should not be one of these factors. There is no reason that a startup should face more barriers to hiring key employees on visas than larger and more established companies do, particularly when most economic growth in the U.S. comes from startups and not large companies. If fraud is a concern, the USCIS should employ a more precise detection and enforcement strategy than its current "carpet bombing" approach.  Congress should also clarify that a foreign national’s ownership of a company should not preclude him or her from being sponsored for a work visa by that company. Most importantly, Congress should enact measures to ensure higher quality and more consistent adjudications at the USCIS.  Although such corrective action is normally within the purview of the executive branch, the Administration has so far failed to rein in the USCIS’s unfair treatment of startups and small companies.

I discussed Goeschl's ideas with two other attorneys whom I respect, and they concurred.

Charles Kuck, former president of the American Immigration Lawyers Association, believes that the USCIS is simply making life miserable for small businesses and startups with the way it is adjudicating cases.  "It's as if they do not want foreign nationals playing any role in job creation", he says.  He believes that the Startup Visa, as it is presently defined, will suffer the same fate as the programs that have preceded it. It presently takes nine months to process the initial two-year conditional residency status for EB-5 investors (the program that the Kerry–Lugar bill is modelled on). Startup Visa processing may take even longer.

Richard Herman, author of a book titled Immigrant Inc. (in which I am profiled), says that the culture of the USCIS is not business friendly; that the adjudicators are not sufficiently trained to understand business documents and business realities; and that the mission of USCIS is not coordinated with the President’s goal of promoting job creation, innovation, and economic development.  If we fix this, we may fix the overall problem.

Unlike the bailouts and stimulus programs that are costing taxpayers hundreds of billions of dollars, a program to bring in the world's best and brightest entrepreneurs will cost us nothing. It could lead to an inflow of billions of dollars in investment from abroad and create thousands of new startups across America and hundreds of thousands of new jobs. As well rather than fuel our global competitors as we are doing with our flawed immigration policies, we will make the U.S. more competitive.

All that I have discussed here addresses the problem of admitting job-creating entrepreneurs to the U.S. It doesn't address the backlog of one million foreign doctors, scientists, and engineers who are in the U.S. legally and in "immigration limbo". They are waiting for permanent-resident visas—which are in extremely short supply. Tens of thousands are returning home, every year, to countries like India and China.  So are the brilliant foreign students who are studying at American universities. All of this is a big loss for the U.S. You can learn about this by watching this segment from CBS Sunday Morning.

Editor's note: Vivek Wadhwa is an entrepreneur turned academic. He is a Visiting Scholar at UC-Berkeley, Senior Research Associate at Harvard Law School , Director of Research at the Center for Entrepreneurship and Research Commercialization at Duke University, andDistinguished Visiting Scholar at The Halle Institute for Global Learning at Emory University. You can follow him on Twitter at @vwadhwa and find his research at www.wadhwa.com.

We’re still trying to figure out exactly whats happening, but Google CR-48 Notebook owners, and even some people who just signed up to get one but haven’t yet, started getting hit with dozens, and then over 100, emails this evening. It all started at around 12:23 am PST.

Why? It appears that people were automatically added to this Google Group – http://groups.google.com/group/chrome-notebook-pilot-users – and then the emails started flowing every minute or two. And then many times a minute as people started posting asking for the spam to stop, which was then sent out to every member. One tipster unsubscribed to the group after over a hundred emails came in over 20 minutes. Another person said they got 89 in rapid fire before unsubscribing.

From one tipster:

Just a few minutes ago I started receiving A LOT of notification emails from the google chrome pilot users group chrome-notebook-pilot-users@googlegroups.com. From some of the comments I don\’t think I am the only one. It seems someone added people to the group automatically and the email notifications started coming in one after another. It was 89 emails from 2:14am to 2:40am. I had to create a filter to stop the onslaught of emails and then go to the google groups settings and set it to \”No Email\” but I never signed myself up for it myself. Seems somebody was being bad.

We’ll update with more info as we get it. Here are some of the messages being posted:

Subject: What the fuck is this?
To: Chrome Notebook Pilot Users
Why am I getting so much spam from this? Jesus Christ!

Subject: This Group
To: Chrome Notebook Pilot Users
Has made me want to hurt someone more then I ever have before!

Subject: Really Pissed Off!!
To: Chrome Notebook Pilot Users
0345 in the morning and my Droid starts Blowing Up!!!
I’m really getting pissed off!!!

> > I never got a Chrome OS notebook, but I recently started getting
> > emails from this group. Does it mean I have been selected and should
> > expect a Chrome OS notebook soon? I applied last year in early
> > December or end of November and didn’t hear anything until now.

> I’m in the exact same boat. Just started getting flooded with emails
> from this group 5 minutes ago yet never received a notebook. Should I
> be on the lookout for one?

The number of companies in the Twitter ecosystem keeps contracting. But not for a necessarily bad reason, but because they keep getting purchased. And what’s crazy is that it’s largely one person who has been buying them up: Bill Gross. We’ve just learned that his company, now called UberMedia, has just acquired TweetDeck.

We’re hearing that the deal, which happened recently, was in the $25 – $30 million range. And this is clearly the largest deal they’ve done yet as TweetDeck is the largest Twitter client outside of Twitter’s own properties.

This deal follows Gross’ company scooping up UberTwitter last month — a popular Twitter client for both BlackBerry and iPhone devices. And prior to that, earlier in January, they bought EchoFon, another popular Twitter client. But again, TweetDeck instantly becomes the crown jewel of the empire. And it means that UberMedia now owns a significant part of the overall ecosystem.

UberMedia has actually changed its name a few times now, partially due to these acquisitions. In April 2010, they launched as TweetUp, then they became PostUp, and then, following the UberTwitter deal, they became UberMedia. The company also own the popular Android Twitter client Twidroyd and Popurls (both of which they bought in July of last year), as well as the ad product, FollowMe. Overall, they fall under Gross’ Idealab.

The UK-based TweetDeck had raised a little over $5 million in funding.

Telogis, a location-based technology firm in Aliso Viejo, Calif. has raised another $2.9 million, according to a new SEC filing, to help businesses track and manage their fleets of vehicles, and workforce using GPS, mobile and web technology.

The company touts its “mobile resource management” software and services as environmentally beneficial, and fuel-saving. According to the Telogis website, its mapping and fleet-management systems help companies: cut [drivers'] idling by more than 25 percent, reduce miles driven out-of-route by 30 percent, and can reduce speeding for better fuel economy.

Telogis systems also “provide baseline data, ongoing collection and record-keeping on [a fleet's] greenhouse gas output,” to help companies stay compliant with rapidly evolving, environmental and transportation legislation.

The Department of Energy via Fueleconomy.gov reports that:

“Aggressive driving (speeding, rapid acceleration and braking) wastes gas. It can lower gas mileage by 33 percent at highway speeds and by 5 percent around town…While each vehicle reaches its optimal fuel economy at a different speed (or range of speeds), gas mileage usually decreases rapidly at speeds above 60 mph… Each 5 mph driven over 60 mph is like paying an additional $0.24 per gallon for gas.”

Founded in 2001, the company previously raised a $3.5 million round in 2009, and a $2 million round in 2010. The filings did not disclose which funds were involved in these deals. According to Crunchbase (TechCrunch’s open directory of technology companies, innovators and products) BNP Paribas backed the company.

Company representatives were not immediately available to provide details about how Telogis plans to spend its new funds. The company has a sales footprint spanning 60 countries, and at the end of 2009 had attained annual revenue of $17.1 million, according to the Inc. 5000 index of America’s fastest-growing, privately owned companies.

On Tuesday this week, Telogis announced that it acquired Intergis, another location-based tech company that specialized in “routing, mobile resource and fleet management software and services for small to mid-sized businesses,” according to a press statement.

There’s much to be said in favor of a successor to iTunes. Not just the application itself, though I’d love to see it disappear, but the whole service. Things move fast, and although Apple moved faster than the music industry, it now finds itself in a distressingly similar, and vulnerable, position. Sony seems to think the iron is hot, and consequently is preparing to strike; SCE CEO Michael Ephraim is quoted by The Age as saying, “Publishers are being held to ransom by Apple and they are looking for other delivery systems, and we are waiting to see what the next three to five years will hold.”

Strong words, but can Sony back them up? The future, they believe, is in streaming, and strong competition is already present in the form of established services like Spotify, Rdio, and Grooveshark. Will Sony’s Music Unlimited service, in the middle of a stepped roll-out in Europe, actually form a credible alternative, or will it languish with low subscriber numbers until Sony kills it off in a couple years?

Continue reading…

In a step back towards the old Digg, Digg Product manager Mike Cieri just sent out an email to partner publishers stating the intent to remove the RSS submitted stories feature. For those of you that remember, the RSS submission feature was how stories from the Reddit publisher account on Digg were sent to the Digg front page in an act of rebellion against the V4 redesign of the site last August.

The painful V4 redesign led to a user revolt and a drastic drop in traffic, with a corresponding increase in traffic over at competitor Reddit.

Cieri’s email says the RSS-submitted content is not performing well, which we can attest to judging by the single digit Diggs on stories and decline of Digg referral traffic on our site, and that the tool is being abused by spammers. The company will be reverting to manual submissions next week.

This is not the first time Digg has brought back V3 features as an attempt to bring back users after the initial V4 vision fell through. It brought back the controversial “Bury” button back in October as well as user profiles on submission pages and popular story statistics just last week.

The RSS submission tool was originally conceived to cater to publishers and expand possibilities for revenue. As this did not work out as planned Digg had no choice but to revert to the way things were says longtime user John Boitnott, “Digg bit off more than they could chew, and changed the way stories were promoted as well as the general conception of the site at the same time, so the massive number of people left.”

The consensus among former Digg users is that removing RSS submissions is a good move, and that V4 essentially turned the site into a “glorified RSS reader.” As the objective of a content aggregator is to filter the news and separate the signal from the noise, the “treating all publisher feeds as equal” model simply did not work.

Full email below:

Publisher Update From Digg

Publishers,

We hope this message finds you well. After a bumpy second half of 2010 at Digg, we are starting to see positive signs of improvement and are optimistic about the direction Digg is headed. In January 2011, we saw double digit growth of diggs and comments, as well as an increase in unique visitors and exit clicks out to publisher sites. We’ve taken a number of concrete steps to stay better connected with the Digg community, and we are taking action to improve Digg based on our community’s feedback. One important point of feedback we’ve heard is that RSS submitted stories are hurting Digg in a number of ways, and in the next week we are going to discontinue the ability to submit content via RSS. We’d like to share the reasoning behind the decision, and let you know what you can do to improve your performance on Digg.

Put very simply, most RSS submitted content is not performing well on Digg. For many of our users, RSS submissions take the fun out of finding and submitting great content. When users try to submit a story to Digg and find that the story has already been auto-submitted via RSS, they lose interest in helping spread the story on Digg by commenting and sharing with friends. Removing a user’s desire to champion a story results in less diggs, comments, exit clicks, and ultimately a much smaller chance of making the Top News section. Our analytics reflect this point – only 4.5% of all Top News content comes from RSS submitted content (95.5% is manually submitted).

At its core, Digg is a community of passionate users who take pride in the content they submit and engage with one another in discussion and promotion of viral content. There is a perception that some publishers don’t participate in the community, use RSS submit as an “auto-pilot” tool to submit content without discretion, and do little to promote submitted content or start discussions. This is one reason why many popular publishers, despite having tens of thousands of followers, are not seeing strong referral numbers for their submissions. Some publishers have cultivated a tight following on Digg by digging and commenting on content other than their own, adding Digg buttons prominently to articles on their site and limiting the content they submit to just their best content. These publishers are seeing much more value from Digg.

Finally, the RSS submission tool has been heavily abused by spammers and has been a constant drain on our technical resources to identify and fight off spam content. The simple act of forcing a manual submission helps to combat spam and ensures that quality content appears on Digg.

So in the next week, the feature will be disabled. We wanted to give advance notice of this change and encourage you to start submitting your best content manually to Digg. You can also enable your audience to help submit and spread your content on Digg by placing Digg buttons on each story item on your site. We are confident that removing RSS submissions will help increase exit clicks to your sites, and ultimately help you receive more value from Digg.

Please feel free to contact me with any questions or thoughts.

Thanks,
Mike

A while back a Seeing Interactive post entitled “You’ve Got Mail Is Ripe For A Sequel” went popular on Hacker News.

In You’ve Got Mail the movie, which is a bit of a joke around TC HQ because of its ties to Aol, The Shop Around The Corner, a small bookstore run by Meg Ryan goes out of business because Fox Books, a huge Borders-type book store run by Tom Hanks, opens up around the corner.

The “Is Ripe For A Sequel” post pointed out how differently that scenario would have played out now. Twelve years later,  Borders, affected by online book sales and sales of competing e-readers, is heading into a tailspin.

“Via everyone on the Internet, Borders is trading at 86 cents a share and has a market cap of 16 million dollars. It has around 700 locations valuing them at less than $100,000 per store.

It's time for a sequel.”

In the short time since the Seeing Interactive post went up, Borders is now trading at 25 cents a share, with a market cap of 18.16 million (vs. let’s say rival Amazon’s 85.35 billion).

The WSJ is reporting that Borders is preparing for bankruptcy and might file for Chapter 11 at the beginning of next week — According to our old friends the people familiar with the matter. Apparently its plans to refinance and convert its unpaid debt into $125 million in loans were not convincing enough for publishers. The report also says that it will close 200 of its 674 stores.

Earlier today my colleague MG Siegler wrote about the Internet’s first victory of the day (something about Egypt):

“'I’m sorry, but there's simply no role for the newspaper anymore. That's not saying there's no role for newspaper journalism, just the physical product itself. It's a waste of paper, ink, and time. R.I.P.”

To borrow MG’s setup:

“I’m sorry, but there’s simply no role for the large, impersonal bookstore anymore. That’s not say there’s no role for book publishing, or even physical books themselves. It’s just that people just aren’t that into cookie cutter brick and mortar.”

On a more positive note (because I think this is sort of sad and am by no means celebrating), bookseller Barnes and Noble, which came out with the Nook e-reader to compete with Amazon’s Kindle and Borders’ The Kobo (yeah, I know), was trading strongly at $18.50 a share, with a market cap of $1.1 billion.

Image: Houbi

Warmest congratulations to the Egyptian people, whose truly grassroots revolution has reminded the world what political action is supposed to look like. Although the work is far from done, and reconstituting a government by the people and for the people is perhaps the more difficult phase, it is right that they, and the world, should take a moment to reflect on a job well done.

Some are using that moment to praise the social media tools used by some of the protesters, and the role the internet played in fueling the revolution. While it’s plain that these things were part of the process, I think the mindset of the online world creates a risk of overstating their importance, and elevating something useful, even powerful, to the status of essential. The people of Egypt made use of what means they had available, just as every oppressed people has in history.

Twitter and Facebook are indeed useful tools, but they are not tools of revolution — at least, no more than Paul Revere’s horse was. People are the tools of revolution, whether their dissent is spread by whisper, by letter, by Facebook, or by some means we haven’t yet imagined. What we, and the Egyptians, should justly be proud of, is not just those qualities which set Egypt’s revolution apart from the last hundred, but those which are fundamental to all of them.

Malcom Gladwell has become the whipping boy of the internet for having suggested however long ago it was that the social web is something that breeds weak connections and requires only a minimum of participation. He was right then, and he’s right now; he wrote a short post the other day defying the gloating masses (sensibly, but haughtily), and concluded with something commentators of the Egyptian revolution should take to heart: “People with a grievance will always find ways to communicate with each other. How they choose to do it is less interesting, in the end, than why they were driven to do it in the first place.”

It’s one thing to give credit where credit is due and admire the rapidity and resilience of internet-based communication. The new uses to which the younger generation is putting the internet are very interesting and point to shifts in the way people are choosing to share information. It’s another thing to ascribe to these things powers they don’t have, powers that rest in the people who use them. It sounds like quibbling, but it’s an important distinction. Facebook greased the gears, but it isn’t the gears, and never will be. The revolution has been brewing for decades, and these same protesters have been in the streets countless times, after organizing by phone, by word of mouth, or simply as a shared reaction to some fresh enormity.

It came to pass that 2011 was when the Egyptian people could take no more — one might say it reached its tipping point — and the long-running movement became a revolution. It’s no surprise that people used the internet to organize — that’s how people communicate right now. It is easy to imagine this happening five years ago, or five years from now. Five years ago we would likely be championing the mobile phone as the savior of Egypt, as without it, how would people have communicated where the police barricades were, or found each other in the crowds? Never mind that the phone would have had little to do with the reason there were crowds to begin with. Five years from now, who knows what we might be crediting when (let us hope) other regimes are bent to the will of the people? El Shaheeed has worn other faces in other times, from Joan of Arc to Rosa Parks, and will wear many more in years to come.

It emerges that the mode in which people speak is not as important as that they can and do speak to begin with. The triumph in Egypt was not one of technology, but of a new, younger point of view that naturally incorporated technology in its methods. The role of the social web must be acknowledged, but stacks up unfavorably to the significance of traditional media like Al Jazeera (which documented and distributed information extremely efficiently), older enabling technology that has achieved saturation (i.e. mobile phones and digital cameras), and more important than any of these things, the dedication and on-the-streets action of people young and old who have been demonstrating and protesting for years.

I don’t want to restate Gladwell’s position on the strengths and weaknesses of social media. He stated them well enough to begin with, and I sincerely believe that the backlash to his attack (if you can call it that) on the internet’s holy cow is based in willful misunderstanding and wishful thinking. It’s a variation of the mindset of the man with the hammer, in which every problem appears to be a nail. Today’s hammer is the social web. I doubt we’ll all ever see eye to eye, but we can at least voice our opinions, which vary wildly even among us here at TechCrunch, as evidenced by the other editorials with which this piece shares the front page (and to which I am trying to resist addressing directly). The democratization of information is a very good thing, and the internet is a powerful tool. I’m glad the people of Egypt could use Facebook and Twitter as part of their revolution, but I’m confident that even if they hadn’t, or if the government had made it impossible, they would have achieved this by other means.

In the end, the only point I really want to make is simply this: the internet is neither necessary nor sufficient for a revolution. An outraged and unified population is both.

[image: Hossam el-Hamalawy on Flickr]

We’re never happy when a TechCruncher leaves, but it’s always nice when they end up somewhere awesome and can feed us lots of confidential information. Ben Meyer at Facebook and Daniel Levine at Accel Partners, for example, send us weekly confidential updates from their companies.

Laura Boychenko, who has been with us since 2008, is working her last day at TechCrunch. On Monday she starts a new job at Google Ventures. And what Google doesn’t know is that we’re keeping Laura on our payroll, too, and we expect lots of inside information to be coming our way.

It’s the TechCrunch way.

Oh, just kidding. Everybody chill out.

But seriously, we’re all going to miss Laura. She’s the one we sent out to do irresponsible things like tear the wrapping off a Google Android statue to get first pictures, and Google security almost had her arrested for it. Luckily we still have MG to do that sort of thing, but still, she’ll be sorely missed.

Good luck at Google Ventures, Laura. They’re lucky to have you.

Music streaming service Pandora has filed to go public. It could end up raising as much as $100 million. Morgan Stanley and J.P. Morgan are co-managing the deal. The filing puts them on track for a mid-2011 IPO, as we reported earlier.

Some financial stats from the SEC filing: For the first nine months of 2010 it lost $328,000 on revenues of $90 million. (Michael Robertson’s $100 million revenue estimate we published earlier this tear was pretty damn close). Pandora’s fiscal year ends on January 31 (weird), but in the prior full year ended on January 31, 2010, it lost $16.7 million on revenues of $55 million. So you can see how much it got its fiscal house in order since then, adding $35 million in revenues and practically eliminating its loss. (Click financial table below to enlarge)

About 86 percent of Pandora’s revenues ($78 million) comes from advertising, the rest ($12 million)comes form subscriptions. Pandora grew revenues 187 percent in the first nine months of 2010 (through October 31), a growth rate that slightly exceeds the 185 percent revenue growth in fiscal 2010 (which was really 2009, plus January). As of October 31, 2010, it still had $41 million in cash.

According to the filing, Pandora has 80 million registered users and 800,000 songs from 80,000 artists. Regsitered users grew from 46 million a year ago, and 22 million in 2009. The hours of music listened to on the service similarly doubled from 1 billion hours in fiscal 2009 to 2.1 billion in fiscal 2010.

As the dominant free Internet music service on the Web, Pandora wants to expand to mobile, automobiles, and other devices. Last year, founder Tim Westergren explained to Charlie Rose how the iPhone doubled Pandora’s growth rate, and below is a more recent TCTV interview Sarah Lacy did a month ago with CTO Tom Conrad on Pandora’s auto ambitions:

Yesterday, after 17 days of protests, former Egyptian president Hosni Mubarak gave a speech to the Egyptian government that made it seem like he would not be stepping down. This led to many people on the ground in Egypt and elsewhere feeling depressed, a series of humorous jokes being bandied back and forth on Facebook and Twitter and one Twitter employee commenting to me,“Well, we can only do so much.”

It has become fashionable amongst Western media and armchair foreign policy experts (hi Malcolm) to dismiss the idea that what happened in Egypt was a digital revolution mainly because most people associate Facebook and Twitter with the mundane over-sharing of what you ate for breakfast. That and the fact that its been pretty damn hard to pin down what exactly causes revolutions. This belief  isn’t helped by the truth that a ton of social media noise did not actually lead to a regime change in Iran during #IranElection.

But the many who said that social media was no match for Mubarak’s stubbornness and the fact that his dictatorship had been there for thirty years overlooked one key thing. #Egypt wasn’t just about Facebook and Twitter, it was about the Internet as a whole.

I started writing about Egypt because I was moved by an email we received on January 27th, with only a subject line, “Re: URGENT: Egypt blocks text messaging as well” and no body. It was from a Canada-based Egyptian, Mohamed El-Zohairy who was trying to get the word out about what would eventually be a complete Internet blackout in Egypt on that day. El-Zohairy’s email led to the following post, “Egypt Situation Gets Worse, People Reporting Internet And SMS Shutdown” and countless others on my part.

Over the next couple of days El-Zohairy would ping me with updates, eventually deciding that he would fly back to Egypt — Sending me a quick email along the lines of “This will be our last communication.” The Internet was still being blocked so I called him immediately and expressed my concern. After Mubarak announced that he would not seek another term in office and the country’s connectivity returned on February 2nd, I received this:

Hi Alexia,

I have been in Egypt since Feb 2nd, and as you can imagine things have been moving really fast. This is the first chance I have to write you an email. I have been going to Tahrir Square every day since I arrived, and thankfully I have been safe and in one piece so far. The government has used every violent trick at their disposal, short of using the army, to kill this revolution. Recently they decided to switch strategies, they are using government controlled TV and press to win the public opinion and turn the people against each other. They are instilling fear into the average Egyptians, fear from foreign invasion by spreading rumors of infiltrators and people with foreign agendas leading the revolution. The truth is that the revolution is lead by the educated middle and upper-middle class Egyptian youth.

Right now, we are using social media to win back most of the public opinion, one friend at a time. It is a tough job, because only 5 million ppl are on facebook and Egypt is a country of 80 million. However, we believe we can educate the people on social media and eventually they will help in educating the rest of the population. The gov’t is making it easy for us though, by using rumors that are REALLY easy to debunk (i.e. The foreign threats are coming from: The US, Iran, Israel, Qatar, Europe. So the whole world has decided to unite in a conspiracy to topple the Egyptian regime)

-Mohamed

This email, from an immigrant who flew to Egypt to take part in protests that culminated successfully today, is micro-proof that this was indeed an Internet revolution. And Zohairy says there were hundreds of activists like him, which was one of the main reasons his cause succeeded.

Pulling a country of 82 million people, around 17 million Internet users, 60 million cellphone subscribers, 7 million home phones, and 5 million Facebook users offline essentially created the largest flashmob ever, with around 8 million protesters in the streets across Egypt today according to reports. Says Zohairy, “Shutting down the Internet was the most stupid move this regime has taken. It gave the revolution huge media attention that wouldn’t have been possible otherwise.”

From posting videos on YouTube, to using PhotoShop to create symbolic logos for the opposition, to using Facebook to organize protests, the events of the past 18 days undoubtedly played out online.

Aside from the more highly publicized manifestations like Khaled Said’s Facebook page, the Al Jazeera YouTube livestream, Speak2Tweet and of course #Jan25, #Mubarak and #Egypt, I have seen webpage memorials built in testament to the protesters, a group texting service centered around #Egypt, a person who took it upon themselves to become their own news network and a forum created to discuss wireless solutions in case an Egypt-style Internet takedown happened again. There are many others.

To those that think that social media functioned merely as an Evite service to Tahrir square: I have heard that the protesters used Google Realtime Search to view tweets when the Egyptian government shut down Twitter, because government officials did not know that Google functionality existed. In addition, activists Googled things like “How to deal with tear gas” and wrote anti-Government propaganda notes on Facebook, tagging all their friends. When the Egyptian government tried to convince its constituents that the protesters were being paid $50 and a bucket of KFC to sit at Tahrir, this image immediately went viral, countering the lies.

Today opposition leader and Googler (need any more proof of my headline?) Wael Ghonim publicly thanked Zuckerberg for Facebook’s role in supporting the protest. This might be the first time in recent history that Google and Facebook have come together on anything. And then there’s this http://www.ismubarakstillpresident.com/.

Do I think the Internet is partially responsible for Mubarak’s resignation? Yes, I do as naive as that might seem to some. But hey don’t ask me, ask the people who organized the movement to take him down.

And in case you need those answers asap, you can find Mohamad Zohairy on Twitter at @elmasry.

Image source

For the past few days, it seems the whole world has been reviewing Sarah Lacy’s new book, Brilliant, Crazy, Cocky: How the Top 1% of Entrepreneurs Profit from Global Chaos .

Fortune’s Dan Primack described it as “an outstanding piece of journalism”, Jon Swartz at USA Today called it “a fascinating new gem of a book,” Vivek Wadhwa in Business Week describes how it “vividly illustrates how the American Dream has become America’s most significant cultural export”  and even Michael Arrington – possibly the world’s most persistent Silicon Valley flag-waiver – jumped in, saying “Sarah's book opened my eyes… to the untenable constraints that people around the world have to work with.” My own – thoroughly biased review can be found here.

But, yeah yeah, blah blah – I get it – it’s a brilliant piece of business journalism. For me, though, the best thing about the book is its cast of characters. The Brilliant, Crazy, Cocky entrepreneurs. The Chinese driving school guy who has his own petting zoo, the Israeli movie mogul, the Brazilian slum-kid-turned-genius-entrepreneur and – of course – Jean de Dieu Kagabo. So while everyone else continues to rave about the important business lessons and geopolitical implications of Sarah’s book, I bullied her into the TCTV studio to chat about some of her favourite people she met while writing it.

The individual parts – one for each country – are below, or you can watch the full thing here.

Rwanda:

China:

Brazil:

Indonesia:

Conclusion:

Ever since AOL announced its $315 million acquisition of the Huffington Post, pundits have been asking what does it mean? Well, look no further. Funny or Die created the faux infommercial above that looks like it was shot 15 years ago. The tagline is, “AOL and the Huffington Post: Bringing the future back to 1996.”

Basically, what you get with AOL-HuffPo are Alec Baldwin editorials and cybersex chatrooms filled with midwestern housewives. Oh, and you can also download your favorite Wav files of Arianna Huffington quotes, which you can listen to every time you get a new email: “Master the Internet.” I am downloading some right now at AOL HQ, from where I’m writing this post.

(For a more sinister video parody, check this one out).

A lot of people like to bitch and moan about how in the age of realtime information, the stream moves too quickly and as a result, there’s a decent chance of inaccurate news being spread. There’s no question it’s an issue, but with the situation in Egypt, we’re once again seeing the overwhelming upside of this realtime data spread that makes services like Twitter so powerful. And just look at the flip side.

The above image shows the frontpage of a newspaper that was delivered this morning. There are hundreds more like it around the country. Many, many people still get their news this way. They woke up this morning, opened the paper and got information that is so old that it’s now totally inaccurate. It’s ridiculous.

This has actually always been an issue — “In related news, DEWEY DEFEATS TRUMAN!,” quips Twitter’s Mark Trammell — but if radio hit the newspaper format over the head, the live, 24/7 television news channels drove a stake in its heart. And now the realtime web has pounded that stake deeper. With a sledgehammer. And then stuck a grenade in the mouth of the corpse.

I’m sorry, but there’s simply no role for the newspaper anymore. That’s not saying there’s no role for newspaper journalism, just the physical product itself. It’s a waste of paper, ink, and time. R.I.P.

[image via @sarahlane - yes, my girlfriend, yadda, yadda]

Fair or unfair, German Web entrepreneurs get a bad rap for being copy cats. If Stefan Gulas is any representation, the same can’t be said for German entrepreneurs making…what I guess you would call futuristic motorized bicycles?

Gulas has spent the last six years building something called the eROCKIT that defies a vehicle category. Unlike a motorcycle, it’s active– you have to pedal to make it go. But unlike a motorized bicycle it goes incredibly fast. So fast it can out accelerate a car. And it’s completely electric, borrowing some technology and looks from your home exercise bike.

Amazingly, Gulas bootstrapped it, without any real vehicle engineering know-how. He’s sold 40 of them for about 12,000 Euros each. The biggest bottleneck is production, so Gulas was in town looking for investors. Sadly for TechCrunchTV, he didn’t actually have an eROCKIT with him, but watching videos of people riding it and interacting with it and one thing was clear– there is something about this device that captivates makes people smile.

It reminds me of the Segway. You get on it and lean and suddenly you’re shooting across a room. We have one in the office and everyone who gets on it, can’t help but laugh. Similarly, you get on the  eROCKIT and pedal, expecting the ingrained sense memory of a bike’s normal acceleration, when the thing just takes off, with a top speed of 50 miles per hour and a distance of 45 miles between charges. And the eROCKIT looks cooler than a Segway. (Not hard.) Gulas has a 3 inch thick binder of press clippings– which all started when a TV reporter was captivated watching him drive the thing around Berlin.

Gulas story of why he created the company reads like a cyclist’s ultimate revenge fantasy. He loves to bike and felt it gave him the “moral superiority” on the road, but in every other way he was at the low end of the  transportation pecking order. Any cyclist who has angrily yelled, “SHARE THE ROAD!” at a car would smile at this product with more acceleration power than a car, same satisfaction of being good to the environment, and the plus of getting exercise at the same time.”You feel super human,” he says excitedly. “You are king of the road!”

Gulas thinks this odd power-pedaling will change the world of transportation and that all automobiles will become more active. I disagree. I lean more towards a future of multitasking in Google’s self-driving car than a return to the Flintstone’s car. But I could see the eROCKIT being huge in a city like San Francisco where it’s  sunny almost every day and home to one of the most aggressive pro-bike cultures on the planet.

Gulas wants to move the company headquarters to California if he’s able to close this funding round. He loves the German engineering heritage of the company, but says European investors have found the project too weird. In just a few weeks in the US, the difference in investor reception has been like night-and-day. While the knock in Europe was that he didn’t have a market for them to evaluate, he says investors here have said the lack of an existing, defined market is what interests them.

And in a strange globalization twist, he expects making the bikes would be cheaper here because some of the materials come from the US, most notably the A123 electric batteries. Either way, he hopes to start selling them here in the next year.

Some video of the eROCKIT in action below.

James Slavet is a partner at Greylock Partners, and just co-led the new $23 million financing of One Kings Lane.

E-commerce was an innovation wasteland for most of the past decade. While social media companies such as YouTube, LinkedIn, Facebook and Twitter were growing exponentially, breakthrough new commerce start-ups have been few and far between. As our friends at First Round Capital noted in this blog post, 7 out of the top 15 sites on the Web were started in the past decade but only 1 of the top 15 e-commerce sites was started during this same period. Who was that new, major e-commerce entrant? Umm, NewEgg.

There haven't been many exciting financial outcomes, either. I'm not talking about pioneers such as Amazon or eBay but the start-ups that came later. Sure, there are a few, such as Zappos, Diapers.com and Stubhub, but not many.

Classic e-commerce businesses were mostly saddled with high customer acquisition costs (loads of Google Adwords spend), low customer retention (one-off transactions), and operating models that consumed cash (due to warehouses full of inventory).

But the e-commerce market is big and ripe for innovation. E-commerce is now more than four times the size of the annual online advertising market. Yet it's only four percent penetrated.

Better Models Emerge

The same trends that have driven innovation elsewhere on the Web – social, local and mobile – are now driving an emerging class of opportunities in e-commerce. A few years ago, a wave of entrepreneurs started engineering new social commerce models and this innovation is paying off in the form of rapidly growing businesses.

This emerging class of companies features Groupon in local commerce, Gilt in private sales and also earlier-stage start-ups in areas including subscription commerce (Shoedazzle), mobile commerce (Shopkick) and next generation marketplaces (Airbnb). Social commerce entrepreneurs have architected fundamentally better models. They've replaced consumer experiences that were uninspiring and overwhelming with experiences that are curated, exciting and addictive. They've reduced customer acquisition costs through word-of-mouth promotion and improved lifetime customer value by re-engaging customers on a regular basis. They've also produced more efficient operating models by holding little-to-no inventory and getting paid by customers before they have to pay vendors.

Now there are hundreds of start-ups racing around the social commerce track. When evaluating new investments at Greylock, we ask ourselves what will be the defining characteristics of the few companies that make it to the winner's circle?

One company we're excited about is One Kings Lane, a promising start-up founded in late 2008 and based in San Francisco. We just announced an investment in the company this morning. One Kings Lane is focused on helping people find high-quality products at great values for home and living, such as furniture, accessories, art, kitchenware, food and wine. We think the company illustrates a few characteristics that will be common among successful social commerce start-ups.

Left Brain, Right Brain

The most successful social commerce teams will combine highly-developed right and left brains. The right brain is essential from the earliest days of a company's life. By right brain I mean the instincts and passion to recognize and deliver an experience that will resonate in a deep, authentic way with the customer. Most v 1.0 e-commerce sites didn't seem to use much of the right brain. In social commerce the experience starts with identifying great merchandise that's unique and hard to find—you can't just get it anywhere. The experience extends to story-telling so that the company describes the merchandise in a compelling way. In the end, it is wrapped up in a brand and experience that customers are excited to identify with and participate in.

In e-commerce operations there are never-ending opportunities for the left brain to test, iterate and improve. The best companies relentlessly crunch data generated from initial customer contacts through to transactions.

The One Kings Lane launch team nailed the initial customer experience. They provided access to "accessible luxury" through a curated selection of unique, high quality products for the home refreshed on a daily basis and sold at reasonable prices. One Kings Lane arrived like a trusted, knowledgeable, stylish friend to help shoppers (mostly women) on their never-ending quest to find great products to decorate their homes and entertain. It was the team's highly-functioning right brain that recognized and tastefully marketed the truly great finds.

But the One Kings Lane team, including CEO Doug Mack, founders Alison Pincus and Susan Feldman and a management team drawn from Walmart.com, eBay, Amazon, Zappos and Netflix, also represents some of the more highly-tuned left brains in online retail today.

Some teams' brains are strong on the right or the left, but the magic comes when they're strong on both sides.

Addicts and Evangelists

In the past, even the best known e-commerce companies grew at a linear pace and acquired the vast majority of their traffic through a combination of paid marketing and SEO. Commerce didn't take off right away through Facebook and Twitter because the products and the experiences most people engage with on classic e-commerce sites were engineered for simplicity, speed, and comprehensiveness. They just weren't exciting, fun or interesting enough to warrant sharing with friends.

What makes a social commerce business work at the core is an experience that is fundamentally worth sharing. The act of sharing involves social capital – you're withdrawing a deposit from the social capital account with a friend when you share something lame with him, and you're earning social capital when you share something cool.

Most social commerce companies do spend money on marketing (in some cases lots of it) but the key difference is that their ROI on paid marketing is amplified by high lifetime value customers (addicts) and viral spread (evangelists). This amplification is what's driving the near exponential growth and increasing defensibility of breakout social commerce companies. When customers are addicted and willingly infect their friends, strong companies get stronger and become ever more difficult to beat.

I first discovered One Kings Lane through my wife and her friends. The women in our neighborhood were showing signs of One King's Lane addiction. Online products that inspire this kind of daily habit are unusual. One King's Lane customers are their greatest champions and the company is acquiring the majority of their customers through word of mouth.

Markets, Not Just Mechanics

Social commerce companies are adopting a range of mechanics that have proven successful in driving user behavior in other kinds of existing social products – including invitation-based access, time-limited sales, daily emails, offers tied to friend referrals and achievements. Over time, I think we will see more e-commerce companies attempt to replicate the mechanics of existing players. Some will execute well on these features, most will not.

But the ultimate driver of new valuable social commerce businesses will be based on the potential of the underlying market the company is addressing. Is it a big enough market? Is it poorly served by existing players?

We were attracted to One Kings Lane's vertical focus. There are very few consumer verticals that aren't already dominated by an existing online brand. The market for home décor products is under served and massive: $150 billion. Think about this question: Who is the defining Web-native e-commerce brand today for home décor products? It doesn't exist. Williams Sonoma generates billions in annual revenue but lacks unique selection. There's a huge amount of vendor fragmentation in the space, which makes it hard for consumers to discover new brands.

One Kings Lane is emerging as the leading e-commerce player in the home décor vertical and the business opportunity is about more than just daily emails or events – it's about successfully addressing a massive, underserved market.

A new generation of breakout social commerce companies is emerging. It's an exciting time to shop!

*Disclosure: Greylock Partners is invested in some of the companies mentioned in this post: Airbnb, Facebook, Groupon, LinkedIn, One Kings Lane and Shopkick.

This article was also posted on the Greylock Partners blog here.

Emerging markets need the Internet. Whether they’re looking up commodity prices or contacting loved ones overseas, users in developing countries like South Africa and Ghana need a way to get online and this unique device from Vodafone looks like a logical and quite elegant way to do just that.

The device is a keyboard with a standard set of RCA cables sprouting out of the back. You plug it into any TV, new or old, and turn it on. Instantly you have 2G or 3G access to an Opera Mini browser, locally relevant news, as well as games, a dictionary, and a text editor. Instead of a PC, a user would plug this in and use it as necessary, downloading data at 90% compression.

Read more…

Jack Dorsey's mobile payments startup Square is celebrating its second birthday today and also embarking on a massive marketing push—a Times Square billboard in New York City. The massive, multi-angle, multi-panel billboard shows how easy it is to use Square on an iPhone, with the tagline “Now everyone can accept credit cards.”

We’re told that Square didn’t pay for the billboard but that it was funded by “generous supporter.” This has been a big week for the company. Square just teamed up with designer Vivienne Tam to launch a limited edition, branded Square credit card reader.

Square, which just raised $27.5 million in new funding, has steadily gained traction as a simple payments option for small businesses and is processing millions of dollars a week in transactions. This billboard should push that number upwards.

Other tech companies that have recently displayed billboards in Times Square include Foursquare and Gowalla.

Evernote rival Springpad has hit a milestone today—one million registered users. In January alone, Springpad saw more than 250,000 new signups. So far, more than 10 million items have been saved by users.

Similar to Evernote, Springpad serves as a multi-platform digital notebook. The service allows you to jot down notes, save websites, images and more. Springpad will then categorizes your saved content, and allows you to share your notes, set reminders and get alerts to relevant news, offers and deals. The app’s semantic data technology allows you to save products, books, movies, recipes and more, and automatically get enhanced information, including price drops, local availability and coupons.

Springpad says that its growth has been fueled by mobile adoption. Nearly half of its users are using its Android app and a third are using Springpad via an iOS device.

Of course, it’s important to note that Evernote has over 6 million users, and is also growing like a weed. But considering the popularity of these note-taking applications, there seems to be room for multiple players.