The Man In The Arena

Yossi Vardi is one of the people I’ve had the pleasure to get to know since starting TechCrunch. You can find him at technology events worldwide - just look for the smiling, wild-haired guy surrounded by a pack of people.

To understand what he has accomplished, see his wikipedia entry. He is most famous for being the original investor in ICQ, but he’s also invested in over 60 other companies.

Yossi was generous enough with his time to join our panel of expertes at TechCrunch40 last month. At one point in the discussion of a group of startups he quoted Theodore Roosevelt from a 1910 speech given in Paris, and drew an analogy to today’s entrepreneurs:

It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.

I spoke with Yossi this week and asked him about his investment approach. He generally invests in young entrepreneurs and only takes common stock. If someone has failed before he’s even more likely to invest - “It makes them want to win even more,” he said. He generally doesn’t look at business plans at all, and just invests in the individual.

I am not nearly as eloquent as Roosevelt or as smart as Vardi, but the words ring true to me, and it was a very special moment at the conference when Vardi spoke about this. If you are an entrepreneur (or think you may be), forget the critics (even us) and the naysayers and just do what your heart tells you to do. You may be wasting your time, but at least you got into the arena. And if you fail, make sure you fail while “daring greatly.” Then, get into the arena again, having learned from your mistakes.

Google Analytics in AIR; That’s What I’m Talking About

Having just bought a Mac after ten years of Windows, I feel as though I have a heightened appreciation for products and services that are pleasurable to use. And while I love websites that implement Ajax or Flash effectively, few online destinations can match the usability of a well-designed desktop application.

That’s why I found Google Analytics AIR beta, publicly released on September 17th, to be such a breath of fresh air (no pun intended, really).

This unofficial AIR version of Google Analytics delivers the functionality of browser-based Google Analytics but with greater usability and a richer experience. If you haven’t heard of AIR (once named “Apollo”), it’s a platform developed by Adobe that enables web developers to deploy their web services outside of the browser so they function more like traditional applications.

This is the first AIR program that I have tested that really gets me excited about the platform. As a beta program, it’s not perfect (I ran into a few errors), but overall it has been executed very well. It’s also nice to see such a full-functional program developed using someone else’s API (in this case, Google’s).

Check out Google Analytics AIR beta and give the developer, Nico, your feedback to help make this thing even better. If you don’t already have AIR, you need to download it to use any AIR-base applications (as with Flash).

Thanks Orli.

Correction and Update: Google doesn’t actually have their own API for Analytics; Nico says he had to make his own to build this program (not exactly sure how that works).

He also says that both Adobe and Google are involved in this project now. Adobe has included the application in its Showcase program, and Google product managers and engineers are providing him with feedback and helping him make it more secure.

Nico says that beta 2 of Google Analytics AIR will be available around the time AIR beta 2 is released to the general public. He’s currently focusing on improved international support and the integration of AdWords.

Parakey: Did Investors Get Left Out In The Cold?

When Facebook acquired Parakey in July, everyone assumed the stockholders of that fledgling startup would be popping the champagne bottles. No matter what the acquisition price (it wasn’t disclosed), if the sellers got Facebook stock in return for their Parakey shares, it would likely be worth a fortune down the road.

It turns out that wasn’t the case. The acquisition price, say two sources close to the deal, was paid in cash and was “less than $4 million,” providing investors with just a 2x return on their investment. Meanwhile, Parakey founders Blake Ross and Joe Hewitt were rewarded handsome stock options to join Facebook as employees in lieu of any cash compensation.

The primary investor in Parakey was Sequoia Capital, but a number of angel investors also participated in the sub-$2 million round that closed in December 2006. The investors were told about the acquisition in mid 2007 just prior to it closing. The terms of the deal were fully disclosed to them, including the number of shares that were being granted to Ross and Hewitt.

Some of those investors clearly weren’t happy with the fact that they were getting a 2x cash return while the founders received different, and likely far more lucrative compensation. Their preference would have been to receive Facebook shares or simply to have kept Parakey as an independent entity with a chance for a larger liquidity event down the road. But reputation matters in silicon valley and they made the decision not to disrupt the deal to avoid being labeled as difficult investors. Clearly, though, it left a bad taste in their mouth.

Even as investors are lining up to fund new Facebook applications, some others are saying they’re unlikely to invest in startups that are focused only on that popular social network/platform. The fact that Facebook is now involved in directly funding some of these application developers via fbFund only makes them more wary - the company may simply pick off the most talented developers and leave the companies, and any investors, behind.

It is often hard to muster up much sympathy for the venture capitalists that fund all of the startups popping up in silicon valley and elsewhere. But their money keeps the system running smoothly. If they don’t see a fair return based on the risk they are bearing (most startups fail outright and are a write off), that well oiled machine could come to a grinding halt.

In this case its not clear that investors were treated unfairly. They did get double their money back for a six month investment, after all. But the Parakey acquisition is an important data point that will be considered by others in the future. Just because Facebook comes knocking on your door doesn’t mean its going to be a big payday for everyone involved.

400 Million Downloads For Firefox In Less Than Three Years

Firefox has been downloaded 400 million times in the three years since v 1.0 launched. It’s been roughly doubling every year. After six months they had 50 million downloads. 100 million after a year, and 200 million after two years.

There are 120 million or so regular Firefox users.

About 50% of TechCrunch readers use Firefox, according to our Google Analytics account, and it is the most popular browser. Internet Explorer is second with 40% and Safari with 6.6%. I didn’t expect to see Playstation Portable on the list, at no. 10.

Zivity: Silicon Valley Elite Dabble in Adult Content

Porn is big business, and the industry has been quick to adapt by copying successful features of new consumer Internet sites. But one thing we haven’t seen until now: respected Silicon Valley entrepreneurs and investors taking a direct interest in funding or running these sites.

The potential payoff from a successful adult site is clearly too high for Silicon Valley to continue to ignore the space, though. And San Francisco-based Zivity is going to be the first experiment out the door. The founders say Zivity isn’t porn, but that certainly depends on how you define the term. The primary content of the site is naked female models.

The company’s founders include Scott Banister, a co-founder of the recently acquired IronPort, as well as other technology veterans. CEO Jeffrey Wescott led security software architecture and scalability at IronPort, and co-founder Cyan Banister was also an IronPort exec. They’ve raised $1 million in funding, although they aren’t yet disclosing any investors other than Banister. Rumor has it that a number of former paypal execs may have invested.

Like Suicide Girls, Zivity is a social network surrounding pictures of attractive women. Users can log in and join the network and view non-nude photos for free. If they want have the clothes taken off, it costs $10 per month.

Paying users get 5 votes per month to give away to models that they like. And every vote from a user is money in the pocket of the model and photographer - they get 80 cents per vote received. The default split is 60 cents to the model and 20 cents to the photographer, but that can be negotiated by models and photographers who’ve achieved a certain level of status in the system. This is where Zivity differs substantially from Suicide Girls, which pays its models a flat fee for their content.

The company is keeping the look and feel of the site under wraps for now, but did send me the screen shot I’ve included here. They also confirmed this is a Flash interface for viewing the photos, although the site itself is built on Rails.

Zivity is raising a second, larger round of financing now, and will launch later this year. Beta accounts are slowing being given out now.

Previous Adult/Porn coverage on TechCrunch - see PornoTube, Eroshare, Heatseak (porn browser), Socialporn and others.

InviteShare In The Press

Associated Press writer Rachel Metz covers InviteShare, the company we acquired last month that lets users get hard-to-find invitations to private betas.

I spoke to Rachel a couple of times while she researched the article. She mentions the fact that some startups might not like the fact that InviteShare allows people to bypass the normal invitation mechanisms they set up. But she also gets the fact that if someone wants into a beta badly enough to go through InviteShare, they are probably the perfect person to test the product. And the days of people paying for beta invitations on eBay should be long gone now.