There are some cool things going on around here that I wanted to share:

• Lafayette CampFiber - Saturday, October 4 - As I’ve mentioned previously, excitement is in the air in Lafayette with the fiber network that is being installed as we speak.  With this as a theme, Geoff Daily has been spearheading the BarCamp-style event planned for the October 4th.  This is the second BarCamp in Louisiana and already has a lot of people registering.  I was hoping to do a VC 101 talk, but have a wedding that weekend.  Will Donaldson is going to lead the discussion.  Get over to Lafayette for this great unconference.  Register on the wiki or through Eventbright.

• NetSquared NO Meetup - Tuesday, September 2 @ 7pm - Jessica Rohloff is rocking out the social media + nonprofit focus of NetSquared by getting this event kicked off right here in New Orleans.  The location is TBD, but should be a great group.  I’ll be leading a discussion on what New Orleans Non-Profits can learn from Web 2.0 - blogging, community building, brand authenticity & transparency. This is going to be a lot of fun.  Sign up on the Meetup site.

• Jelly Co-Working - Friday, August 29 - Benjamin Reese is getting Jelly, a national collective of co-working initiatives off the ground here in NOLA.  If you haven’t heard of co-working, its a way for those of us who work alone “virtually” either from an office or at home, to get together with other human’s every once in a while and have a conversation in person, not just over twitter.  We’re going to try to do one right here at Voodoo next Friday!  Register on the wiki if you think you can make it.  Free wifi and coffee, and maybe we’ll get some beer for the afternoon.

Hope you can make it to all of these, its exciting to see the Louisiana Tech community gelling this way.

Take note: these are all “open source” community initiatives.  We’re getting it together down here, and its by the contribution that we all make.  We get out of it what we put in. Let’s build it together.

The dustup between the Demo conference and the TechCrunch 50 conference has spilled over to the NY Times today with some of the  press-friendly accusations coming to the forefront:

To Michael Arrington, the elbow-throwing, supercilious founder of the popular Silicon Valley blog TechCrunch, Demo’s business model amounts to “payola.”

This coming on the heals of the accusation by someone loosely associated with the Demo conference writing to Alex Muse accusing Jason Calacanis of plagiarism.  I happened to think that Calacanis’s demo tips for a startup were incredibly valuable, and I’m enjoying his conversion from blogger to emailer as a whole. The startup tips rang true for me, because a couple weeks ago we demoed our pitch for the TC50 to Heather Harde.

Well, the news is, out of the 1038 startups that applied, we didn’t get to the final round of 50 that will demo on stage, but we did get invited to participate in the “Demo Pit.” In the demo pit we’ll get to showcase the new Flatsourcing Dashboard to all conference attendees, and we’ll be vying with a bunch of other startups trying to do the same thing.  It’ll be chaotic, fun, exhilarating, and a great launch pad for the Flatsourcing Dashboard.

So, what is the Flatsourcing Dashboard?  We’ll I could tell you, but then I’d be violating our pledge to the TC50 conference.  So for now we must keep it under wraps, although we may offer a few sneak peaks as things get closer.

What I can tell you is we plan to shake up the collaboration space by offering a tool that truly provides “Outsourcing Insight”.

We are thrilled to be DEMO-ing at TC50! Follow Will & me on Twitter for updates.  And if you will be in San Fran Sept 8-10, we want to meet up with you.  Drop us a line.

Stay tuned!

I love attending the SXSW Interactive conference every year.  It’s my favorite conference of the year, a chance to learn, catch up with old friends, meet new ones, and of course have a great time.

Last year I pledged to myself that I would try to get further involved and organize a panel for this 2009.  So I put together a panel submission covering a topic that I have a little expertise on and I think people are interested in hearing about.

Let me start by saying, my goal for this post is that you will click on over to the SXSW Panel Picker and vote for our panel and even leave a comment about how much you want to see it. OK, so now that that is out there, let me tell you why you should do that.

Our panel is called: Outsourcing 2.0: Is the World Flat or Not?

The topic of the panel stems from a discussion I had last year with Sandeep Sood of Monsoon Company, a fellow oursourcing firm, about the challenges of outsourcing web development work, whether the pain of working with a team thousands of miles away is worth it, and how to develop personal relationships that bridge cultural and geographical borders.

I am fortunate to have rounded up some great co-panelists for this discussion all of whom bring a different perspective to outsourcing and each of whom run a successful development firm:

• Sandeep Sood – Sandeep runs Monsoon Company in Berkley with teams in India. He authors the Doubsourcing comic (recently featured in WSJ) and sends his apologies to Thomas Friedman that he believes the world is not yet flat in Forbes.
• Qasim Mueen – Qasim is in Pittsburgh with teams in Pakistan. He is the co-founder and CEO of Zigron.
• Andrea Azdril – Andrea is Los Angeles with development in Beijing, China. She is the CEO of StarTech Global and frequently travels back and forth from China.

Some personal thoughts on this panel that I’d like to share:

Submitting a panel topic about outsourcing web development work to a conference full of web developers feels a little like trying to sell ice cubes to eskimos.  It definitely is a topic that may be somewhat taboo, certainly considering these economic times and what you hear in the media about jobs going overseas.

Along the same lines, I sometimes feel challenged talking about our business structure, and our Flatsourcing team with colleagues in New Orleans.  I am friends with talented web developers locally who are looking for work, is it parodoxical to be passionate about supporting the local community while taking my work and having it done in Russia?

I think reconciling these feelings is a lot of why I believe this panel topic to be so important.  There are real tensions and preconceptions about outsourcing, and the controversial nature of the topic is exactly why I believe we need to discuss it.

I fully expect to have the question thrown at me “Why are you hiring guys 3000 miles away instead of guys in this room?” And that will be a tough question to answer.

When I think about that question, it boils down my personal feeling that the world really is getting smaller.  Imagine a world that truly was flat, so a business partner or employee on the other side of the world was as easy to work with as your neighbor across the street.  Collaboration tools, broadband, and common language of software means you can work with whomever you choose.

In 2001, I met three guys over eLance because I needed someone to build a website for me, and I couldn’t do it, and I didn’t know anyone personally who could.  They did a great job, we continued to build our partnership, and a few trips to Russia and eight years later we’re in business together.  And asking me why I’m working with them over someone local simply boils down to the fact that this is the direction I have chosen, it is working, and the value of our relationships is not something that I measure in terms of how far away they are.

This may be the case for you, Chris, but what about if I am evaluating outsourcing now, with no personal history.  I’m working with a clean slate?

Well, this is the discussion I have almost every day with clients.  Outsourcing exists because there is global demand for talent and there is a global marketplace.  Release the bonds of locale, and your hiring pool is global.  Wouldn’t you want to explore the opportunity to hire top talent, anywhere in the world?

That is the reality of what you can do today.

It’s not about low cost, its about value.  And value is driven more by quality than cost.  Web development in particular is a marketplace that is fully globalized. It opens up a world of opportunity to build new “virtual” companies that transcend borders.

So, that is a sneak peak at some of the thoughts I am looking forward to sharing on the panel.  I’d love you hear some of yours in the comments.  Ask me the tough questions, I hope to be able to answer them.

I genuinely hope that we have the opportunity to discuss this at SXSW.  You can help by voting for us here.

Thanks.

I’ve lived in New Orleans for just six years now, but it feels like a lifetime in internet years when I think about the transformation of high tech in the state during my time here.

When I got here, the internet community was shaking off the crash of the dot-coms and New Orleans felt like a internet ghost town to me.  Though there were several successful internet companies locally, they weren’t connected through tech organizations or informal social networks.

There has been a confluence of events and initiatives that are starting to gel, and I believe Louisiana is on the brink of massive opportunity. Here are the things that are keeping me up at night and that I am positioning Voodoo Ventures to leverage.

• Tax Incentives - On the heels of the success of the film tax credit, the state instituted various powerful tax incentives that are starting to work their way into the consciousness of investors and startups.  They are here for the taking today.  The angel investor tax credit that enables an angel investor to receive refundable tax credits of 50% of their investment in a qualified Louisiana entrepreneurial business. Digital media tax credit enables a company to receive a tax credit worth 20% of expenditures in Louisiana.  The definition initially applied to video game development firms, as Geoff Daily reports, apparently Chris Stelly, director of film industry development within the Office of Entertainment Industry Development, feels the definition is expanded so that “that potentially any interactive Internet application could qualify.”

• Startup Ecosystem - When I moved here I’d go months without running into someone who worked on the internet.  Now I have lunch twice a week with folks doing exactly what I do.  The transformation has been dramatic.  It is both an influx of new talent to Louisiana, but more than that I think it is a new interconnectedness.  This results from new social networking tools like Facebook, LinkedIn and Twitter. Twitter being the most powerful locally at this point to connect the many techies in New Orleans and Louisiana.  Beyond that, I see movements taking place that are bringing a new energy to wanting to get together.  I say movements rather than formal organizations because most of the excitement is not “owned” by anyone.  People are self organizing with unconferences and meetups that are more chaotic but more satisfying than traditional organizations.  We hosted the first BarCamp in Louisiana in February and got a great response and generated a lot of connections.  The next BarCamp is being organized as we speak in Lafayette around the theme of the coming fiber to the last mile and the opportunities that will generate there (more on that later).  The need for a database of techies, startups, and the people that support them is one of the biggest initiatives that I have heard people talking about, and its going to happen very quickly.  Alan Gutierrez and I have been talking a lot about this and he may host it on ThinkNola.  Benjamin Reese has started a self organizing spreadsheet already and Jessica Rohloff wants to push this ahead.  If anyone has feedback on the best way to do it, I am all ears.  This needs to be by the community, for the community and probably warrants its own post.

• Katrina - Katrina was a terrible tragedy that affected so many in New Orleans and Louisiana.  Its impact is still being felt.  Out of great tragedy comes opportunity, and in years since Katrina, a new crop of talented people have moved to Louisiana.  New business have sprung up to replace old ones.  And there is a realization that the creative and tech economy can be the economic engine we need in New Orleans and Louisiana to supplement tourism, the port, and oil and gas.  I believe it will be.

• Air Force Cyber Command in Shreveport - Barksdale Air Force base has been selected as a provisional location for the Cyber Command center.  This is generating a tremendous amount of excitement in the state and has the potential to generated tens of thousands of new jobs in the area.  Already planning is underway for the Cyber Innovation center located there that will promote research and provide infrastructure to businesses and startups spawned by the Cyber Command center.  A recent editorial in the Shreveport Times touts the tremendous impact this will have on the state economy.

• Lafayette “Last Mile” Fiber Network - Lafayette is building out the country’s only fiber into the home network that is equipped with a free 100Mbps intranet for every subscriber and tied to the limitless dynamic computer power of Abacus Data Exchange’s LiquidIQ and the LITE Center’s array of supercomputers.  The network is owned by LUS, a public utility, (and not a telco) and will eventually reach about 120,000 subscribers in Lafayette.  The first residential subscribers will come online around January, 2009.  This is going to bring revolutionary increase in the bandwidth available to the internet that will undoubtedly spawn new services and business.  This is one of the first networks of its kind in the US, but it is a vision for the way we will all one day be connected.  Lafayette and Louisiana will get a sneak peak at what this speed of access can bring, and we have to opportunity to get a jump on developing business models and services that leverage it.

These five factors have me incredibly excited right now about the opportunities that are presenting themselves right now to entrepreneurs in this state.  I’ll be sharing more about some things that Voodoo Ventures will be doing to leverages these opportunities and I’d love to hear what you think.

How are these changes going to affect our lives?  What opportunities do you see?

(If any experts want to expand on any of the details I’ve laid out or offer corrections / clarifications, please do so.  It’s a lot of information that I’m trying to aggregate.)

Charlie O’Donnell has a good summary of the big lesson from the Twitter - Summize acquisition confirmed today, and how $750,000 in funding helped Summize leap Tweetscan as the leader in the Twitter search space and get to the sale to Twitter.

So, when your investor is having this kind of smart conversation with an investor in one of your likely acquirers, you’re at a HUGE advantage.  This isn’t someone pitching your company to get flipped–this was some pretty high level thinking (and outside the valley thinking, I might add).

So while you’re protecting all your equity from those big bad investors, ask yourself the question of who’s having these types of conversations with key decision makers and thinkers about your company.  “Who’s a lot more experienced than I am that thinks intelligently about my company’s strategy–and cares about it?”

THAT’s the kind of investor that makes the rest of your equity worth multiples of what it is the moment they take their 20-30%.

The lesson: Early mover advantage doesn’t alway pay off if you can’t sustain your infrastucture due to lack of capital.

Well, maybe.  It’s one of two reasons.  Either, he wishes Silicon Alley Reporter had been 8 years later because he was doing all of this blogging stuff before blogging was blogging.  Or, because he wishes Mahalo had been a blog network instead of a semantic search engine. Either way, he’s just waiting out the storm because its about to be back to the amateurs (like me).

So, its time to mark the end of the uprising.  All of the tech blogs that bucked the “mainstream media” and have dominated the conversation for the last 5 years.  It is quite an achievement, and media is forever changed. But, the wall is crumbling. Let us recount:

• Preview: Conde Nast buys Reddit - Oct 2006
• MediaBistro cashes out - July 2007
• Scobelizer and Fast Company hook up - March 2008
• Conde Nast takes out Ars Technica. - May 2008
• PaidContent rocks it $30 mil - July 2008
• Guy Kawasaki sells Truemors - (what?) - July 2008

Who is next?  Well, two guaranteed predictions:

• Readwriteweb
• TechCrunch - Henry Blodget’s $100 mil valuation is just months away.

Ain’t it great when old media gets a whiff of new media?

I’ve been a fan of Eric Marcoullier since I first added the MyBlogLog widget to this blog a year and a half ago.  He (and his partner Todd) transformed blogs into social networks and Yahoo snapped up the company last year.

Eric and I hooked up at SXSW in March to meet for the first time in person after he had reached out to offer support for the BarCamp New Orleans.  I was thrilled to get a chance to spend some time with him and I asked him what he was going to be up to next.

He told me about Gnip.

The word “ping” spelled backwards.  I don’t pretend to be an internet infrastructure guru, but understanding what a ping is in laymans terms, and then applying it to the vast amounts of data being piped around thanks to your activities on the social web make it clear that GNIP is going to be a welcome solution.

Just as blog ping services gave blog search engines the notification they needed to update themselves when someone posted something new, Gnip will provide this service to pipe the data from data producers like Digg and Flickr to data consumers like Plaxo and MyBlogLog.

It’s a big responsibility, it centralizes data feeds but creates dependencies.  As we all understand from Twitters recent headaches, if data pipes get clogged, no one is happy.  If Gnip becomes the centralized system, it will be both extremely valuable and also extremely important player.  Simply put, it can’t go down.  But they’ve got the best in the business (Pivotal Labs) building their infrastructure.

I wish Eric the best of luck.  More details on the service here, here and here.

New Orleans Connection:

Eric went to Tulane.  He has expressed to me his desire to continue to support the New Orleans tech community and nurture our growth.  I know he’s be willing to come down to New Orleans for a talk or event this fall.  Let’s try to get this native son back to Louisiana and learn something from him… what do you say?

Today I came across a blog post by Steve Barsh in which he posted his slide deck from a talk he’s gave in SF recently.

Flipping through the deck, I came across one of the most straightforward and insightful presentations of the numbers that a VC is basing investment decisions on, often called “magic ratios.”

If you are trying to raise $2 mil from a VC at a $5 mil valuation, you will need to be able to show a path to a $100 mil exit in 5 yrs to show a 10x return assuming 50% dilution through future rounds.

The implication of this is very clear.  It’s easy to talk about raising $2 mil, but you need to be focused on whether there is an exit for your company at $100 mil, and how you are going to get there.  That’s what your VC is thinking about.

Check out slide 4 of the slide deck embedded below.  Thanks for the insight & clarity Steve.

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I just got back from visiting my partners in Flatsourcing in Kazan, Russia. This was my third trip to Kazan, and by far the most exciting. This stems from both the growth we are experiencing with Flatsourcing, but even more importantly the changes that are taking place right before my eyes in the city.

On arrival in Kazan, one of the first things you notice is that the whole city is under construction. Since last year a major road repair program has taken place and pot-hole lines streets have been replaced with paved, widened highways. Soviet-era block houses are being replaced by new apartment buildings. I was fortunate enough to stay in a new apartment that Oleg’s family has purchased. In the last three years mortgages have become commonplace in Russia, and cars and apartments are fast becoming part of the middle-class lifestyle. Speaking of cars, as we drove to work each morning, we passed dealerships for Honda, Toyota, and Hyundai as well as Mercedes and BMW. Word is that the Chinese auto manufacturers will be invading next year. They already have their fleets on the road in the form of big beautiful city busses. Just last year the city bus fleet was ragged, its been upgraded by Chinese manufacturers like Golden Dragon.

Shopping malls are all over the place. Kazan actually has more shopping malls per capita than Paris. We ate lunch at a shopping mall food court at a Russian fast food chain ironically named CCCP (translated as USSR). I asked the guys if this was offensive or threatening to anyone. Nope, they said, they Soviet era has been relegated to nostalgia by modern capitalism that is fueling the country’s growth. CCCP now is simply a fast food joint serving the world’s biggest brand, Coca-Cola.

You can’t help but notice how IT oriented the city is. One of the things I trumpet about Kazan is that there are more than 20 universities, most of them technical. This is a university town graduating the next generation of computer programmers annually. Kazan, and Russia as a whole has a culture of IT. The coolest job you can have is a computer programmer. Being high tech opens the doors of opportunity, including working at Google in St. Petersburg, or eventually working in the US if you are good enough.

Billboards around the city advertise HP desktops and laptops. The government has just invested in a beautiful IT startup “IDEA Park” to provide office space to startups complete with furnished desks and computers. The rent is discounted 50% for winners of an annual business plan competition.

Two years ago Fujitsu moved an entire office from the UK to Kazan through a partnership with a Russian based IT company, ICL. Since then, IBM has moved in and is partnering with Kazan State University and there were rumors when I was there that Microsoft is next and that top talent is starting to be recruited by Microsoft.

I can’t wait to see what Kazan looks like next year. One thing is for sure, the Flatsourcing office will have quadrupled in size and we’ll be hiring more!

Finally, the hottest gadget in Russia by far is the iPhone. I brought three of them over for Oleg, Alex, and Timur and they were promptly unlocked and filled with some of the most amazing software that we’ll learn about over here in the near future. I ended up leaving my personal one behind as well. Even though carriers don’t sell them yet, and they go for upwards of $800 on the black market, our last night there we were surprised to see the women at the two tables on either side of us to be taking pictures of each other with their iPhones. An apt metaphor for falling borders in this ever-flattening world!

Happy birthday from the whole staff! It was nice to have you recently here in Kazan and hope you arrive on time enough to be able to celebrate a birthday with family! Hapy birthday!!!