Check out CouponLooker

My team at Judy's Book has been hard at work lately! They've just released a little experiment that I think is very cool -- it's called CouponLooker and simply put is the best way to search for a coupon online (period, exclamation point). !

WHY COUPONLOOKER MATTERS?
People love to save money! And thus, many people love coupons.  When shopping online, most online checkout forms have a field for coupon code entry. It's a pain in the ass to find the right coupon code to put into the box to actually save the money. (this probably isn't accidental). Google and other companies don’t make it easy for consumers to find this information. Couponlooker is designed to solve that simple pain -- and to save people money....which is something that the entire team at Judy's Book has gotten obsessed with recently.  Moreover,  CouponLooker would not be possible were it not for the engine that we're building at Judy's Book.  More cool stuff to come!

HOW COUPONLOOKER WORKS
We monitor top coupon and deal sites, extract online coupon information and then de-dupe and surface the best coupons. We display data like the coupon code, the store, and the expiration date to save users time and effort. Because we’re focusing on finding coupons as opposed to web pages about coupons we do a better job than other sites. (I think)

Please check it out and let me know what you think (give me feedbac) via email at :
info at couponlooker dot com. 

You can also check out the coupon widget right here on my blog....

Seattle Open Coffee Club Trial

I've long complained that there isn't more early stage entrepreneur and investor networking in Seattle....so I decided to try and do something about it.

I'm going to try this format and see how it goes. I'm setting up a weekly meeting at Louisa's on Eastlake, Tuesdays at 8:30 AM starting on April 17 2007.  Come have a cup of coffee with me and others.

And please spread the word!!  Check it out here.

204.5: Two pounds forward, two pounds backward

I don't know if I should be disappointed or not but today I did my Wednesday weigh in and I was 2 pounds heavier than last week. I exercised a lot last week. I ate pretty well -- except for last night when I had a huge meal. I ate at Chandlers and had king crab, soup, and appetizers. I'm hoping it was just a bad day and that I return to sub 203 next week. We'll see. Work to do. Food not to eat.

Google is so web 1.0

From Bambi Francisco of Marketwatch:

The topic of Google came up after Perkins predicted that there would be a Web 2.0 shakeout in the next 12 months, pointing to YouTube's $1.65 billion sale to Google last summer as a symptom of a potential sign of irrational exuberance about to break out.

If spending is any measure of irrationality over an opportunity, he has a point. Some $844.4 million was invested in 167 Web 2.0 deals around the world last year, more than twice as much money and nearly twice as many deals as in 2005, according to Dow Jones VentureOne and Ernst & Young. The U.S. dominated Web 2.0 investing, accounting for $682 million and 126 deals.

Trying to shut down alexaholic is stupid

I read Mike Arrington's post about Amazon's recent attempt to shut down alexaholic -- in my opinion, this is stupid.  Alexaholics success is a result of Alexa's failure to service their own customers expediently and sufficiently. Alexa could easily put Alexaholic out of business if they improved their service (period). The improvements are relatively simple too. Just allow a user to compare different web sites traffic grids against each other. For goodness sakes, this is clearly amongst the primary use cases at Alexa.
If Alexa didn't want to do this, my guess is Alexa could have bought  Alexaholic too. While on first blush this may have seemed stupid, I don't think it's nearly as stupid as trying to use legal methods to shut  Alexaholic down. That's really stupid....and unlike Amazon in my opinion. In my opinion, they've been a company that has typically embraced web services and innovation more generally.   Why are they doing this? It seems that Amazon prefers legislation to innovation.  I don't get it.

Spammers at work

This marketers vs. technology battle plays out at digg, reddit, and my new favorite website, mybloglog.
I got this spam in my message box at mybloglog....
From Samuel Komo,

After going through your profile , I decided to contact you for the relationship and bussines assistance .

Well, to introducing myeslf, I am Samuel Komo ,  TWENTY ONE years,  I  am a citizen of Cote D'ivoire former Ivory Coast in West Africa.

I am writing to solicit your noble assistance for the transfering and investment of  Nine Million, United Stat Dollars US D.
This doesn't mean the marketers are winning

We had to fight spammers last week at Judy's Book. Someone had co-opted our "invite a friend" feature and was using it to send 30,000 messages or more a day. We were able to shut them down...but not without a disruption of our development calendar and a fair amount of work. 
The battle rages on...

Good data from a Greg Sterling post

Below is an excerpt from a Greg Sterling post. The numbers surrounding what influences consumer behaviour are quite relevant for Judy's Book.

Consumers said that they were most motivated to begin an online search after viewing advertisements in magazines (47.2%), newspapers (42.3%), on TV (42.8%) and from reading articles (43.7%). Women were more likely than men to be motivated by coupons (41.8% vs. 29.0%) and in-store promotions (29.0% vs. 24.5%) while men were more driven to start an online search based on a face-to-face conversation (36.1% vs. 29.5%).

After searching, online consumers said they are most likely to communicate with others about their search through face-to-face discussion (68.9%), though email (53.1%), telephone (50.9%), and cell phone (30%) communication were also popular choices. Young adults 18-24 are also taking advantage of an influx of new media, communicating about service, products and brands by instant messaging (37.5%), text messaging (23.7%) and through online communities like MySpace and Facebook (20.6%).

2007 Digital Outlook report from Avenue A


Vertical spending, originally uploaded by a sack of seattle.

This report is worth looking . I like this graph -- it supports my thinking on verticals.

This quote is directly from the report:
"The breakout of spend within the vertical category saw a significant shift in 2006, with News, Reference, Business, and Entertainment all up considerably over 2005. While communities and social networks have sometimes been seen as a service looking for a revenue model, spending in that category was up 69% year-over-year and 216% since 2004. As a result of that increase, the Community category tied with Entertainment as the vertical with the largest share of billings.

Advice for entrepreneurs negotiating venture capital term sheets

I just got off the phone with a fellow entrepreneur in Seattle. He's CEO of a very cool start up that is in the process of raising its Series A. I am an investor in the angel bridge note. I'm not going to tell you the name of the company because they're busy negotiating a deal and the CEO would shoot me. But I do want to tell you and other entrepreneurs the advice I gave him.  This post has two parts: an outline of the financing situation followed by my advice.

I) THE FINANCING SITUATION (all numbers are fictional to protect the company):
There was a bridge note done in October of 2006. The company raised $1,000,000 at a 25% discount on the valuation of the Series A round (if there is one) and gave 20% warrant coverage.  Included in the bridge note terms was a maximum valuation of $4,000,000 for the Series A round. The note terms did not include pro-rata rights for the angel.
Along comes tier 1 venture capitalist and gives the company a series A term sheet. VC wants to put $4,000,000 into the company at a $9,500,000 pre-money valuation. The VC claims to want a 30% equity stake in the company and wants to have a 20% option pool for new hires. The liquidation preference is 1 times money invested. The company today is pre-revenue. There's lots more to say, but that's the gist of the deal.

MY ADVICE
The CEO called and was distressed about founder dilution and didn't want to give the angels pro-rata rights. My comments to him were:

  • CONGRATULATIONS!! Close the deal! You got a 9.5 MM valuation for a pre-revenue company!!
  • Don't get hung up on your dilution (or on valuation)- this is a mistake I see a lot of entrepreneurs make. They get worried about how much they own and that leads to a tendency to start to optimize on economics. Fight this -- don't worry -- and get the deal done.
  • Give the angels pro-rata - Now this may have to come at the cost of the big VC or the founders , but my advice to the CEO is that life is long and you don't know whether this company is going to make it (in fact odds are against you)....so if you want to do another company, you want the group of people who want to support you to be as big as possible. Those people who support you when you've got nothing --who took a risk on the company not because of the company but because of you...those are the people you want to keep happy and close to you. Do the right thing by them!
  • Be careful of the common VC strategy of pumping up the valuation but requiring a extra large option pool. That's what I see in this case. 9.5MM for a pre-revenue company is a lot...but the VC is requiring a 20% option pool which is also a lot and has the affect of lowering the effective valuation (from the VCs perspective).
  • All VCs have models of how they want to deals. In this case, the VC wants to own 30% after the deal is done.  This is negotiable! The difference between 28% and 30% is negligible. The reason for these models is the VCs only want to spend their time and money when they have enough at stake. The second reason for these target % ownerships is to give the VC a pressure point when negotiating with entrepreneurs. The first reason is valid the second reason is bs.
  • Focus on the other terms in the term sheet like liquidation preference (1x), board structure, pro-rata rights
  • Oh, and congratulations, get the deal done!

Fatblogging: 204.5

I play squash on Wednesday mornings. I weigh myself naked and I'm 204. So that's my benchmark.

I know that some people weigh themselves each day. I'm not one of those people. I'm doing this to get and feel fit and inherently that means losing a few pounds. So I'll weigh myself every Wednesday after squash and tell you where I am. Last week I was 203 -- this week I'm 204.5. I doubt that I gained 1.5 pounds but that's what the scale says. I also lost a close one in squash.

Shelfari

I made a small personal investment in Shelfari recently. I made the investment for 3 reasons:

  1. I like the entrepreneur Josh Hug from the first time I met him.
  2. I know (or like to think I know) a fair amount about social networking meets vertical -- and in this instance, it's books. I think this works
  3. The product is cool
  4. I think it has the potential to be another kind of www.mybloglog.com. Which I think is friggin awesome. There's more to say here but I don't want to give away any company secrets.

ii

fatblogging

OK -- I'm joining the group. I've watched with interest the ranks of late 30 somethings and early 40 somethings grappling online (blogging) with weight. Well  not to be left behind -- I'm joining the group this week.
I need to get a few important items which I do not currently have -- a scale, a concrete exercise plan, and a piece of humble pie to replace my Oreos and french fries. 
I will post about my fitness and weight but I don't think I'm going to do it daily -- is this required?

Wish me luck.

Why CItySearch bought troubled Insider Pages?

Well, I don't know.

The rationale probably went something like this :
i) 2MM unique visitors
ii) Decent product that focussed more readily on areas outside entertainment
iii) An asset that could be monetized by Citysearch's sales force

Historically, I've been a huge fan of IAC. I saw them as the untold juggernaut of local -- they bought service magic, trip advisor, expedia and sidewalk (microsoft's asset that merged with citysearch). If you properly integrate these services you've got the best property for local search on the web. But, as awesome as they've been at acquiring companies, they've (from my outside perspective) been crappy at integrating and executing these assets.
So while the price may have been only 10 or 13MM dollars, I don't see what they're going to do with the asset(s).
If you saw my post the other day, I thought it made sense for one of the directory or yellow pages companies to buy the company. Oh well...shows what I know.

Menu Entrepreneurs

I had coffee today with John Li at Menuism.  I met John after my blog post on Judy's Book and my belief that we should have focused more energy here. We had a good conversation about teh food and restaurant space generally and how to go about creating a real traffic asset here. I left the meeting feeling energized -- he's and his partner left microsoft and have self funded their site. They're engaged in the process of building a business and have done some cool stuff. I look forward to watching their progress....check their site out.
My conversation with John reminded me of my friend Greg Barton at Menupages.  (I owe him a phone call!) I met Greg 2 plus years ago and think he's doing a great job --  check his site out too.