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Marcelo Calbucci (Sampa)
Average of 7 posts per month.
January 1
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06:37 PM
I wish all the readers of this blog an awesome and fullfiling 2009! I hope all those that are planning on leaving their corporate jobs to start a company, to do so this year. I hope all that have a startup in progress to achieve the exit or other milestones they want to achieve, but most importantly, I'll work even harder through this blog, through the Seattle 2.0 blog and through other avenues to help you all! Cheers! 
December 11
, 2008
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11:36 AM
I find marketing a fascinating subject, and there is nothing more fascinating on TV, print and online than the spins from the energy and oil industry. Look at the Shell, BP, Exxon commercials and you think those are the most awesome companies in the world, doing the right thing for humanity. The latest fad is "clean coal". This term has been around for 2+ years I'm pretty sure I blogged how stupid it is. Clean coal is the same thing as safe guns and healthy cigarettes. Don't let the marketers fool you! BTW, on the same topic... Hybrid cars are not green!!! They are just a tiny evolution of the internal combustion cars which is always a bad thing. In my view, green cars would be either solar-powered cars, hydrogen-powered cars, or electric cars that use hydro, wind or solar energy to recharge batteries. The next inline would be nuclear-powered car, which cannot be considered clean until we figure out how to avoid the whole radioactive waste issue, but we will. 
December 8
, 2008
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11:25 AM
Although I worked on MSN Search for 4.5 years, I was just marginally involved with the core search technology, meaning, I never implemented any of the key elements that make up a search engine backend. My whole thing was the networking, aggregation of content, rendering, etc. (call it the front-end and middle tier) However, just by being around I learned a lot about Information Retrieval and its associated elements, which includes: spell checking, word breaking, phrasal speller, content indexing, ranking, white/gray/black lists, dictionaries, natural language parsing, etc. I don't have any depth in any of those areas, but I know enough to get a lot of things done. Both, at Sampa and at Seattle 2.0 I have used that knowledge extensively. At Sampa, thanks for my simplistic understanding of IR, our users don't get too many comments or guestbooks spam. At Seattle 2.0, I used a bit more knowledge and built a system to rank blog posts from more than 100 different blogs around Seattle according to the relevancy for the Seattle startup community. When there is almost no link-exchange between those posts, you are left with the content of the post and the previous posts of a blogger to understand its relevance. The system is very flawed in many ways, but get to the 80% mark, which is good enough. If I wanted to take it to the 95% mark it would cost me an investment of 2-3 months, which doesn't add up for such a small gain. If you are working with content, web 2.0, blogs or any other kind of product that could benefit from a bit of semantic analysis, I recommend you learn a bit about Information Retrieval. 
December 4
, 2008
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10:08 AM
As time passes, you forget to celebrate certain special dates, mostly because they lose meaning, but 4 years and 3 days ago (December 1st, 2004) was my last day at Microsoft. I said good-bye to all my friends and colleagues during the week and previous week. I went to the office in the morning, cleaned up my computer (over the weekend I had already cleaned up my personal belongings), and went to my exit interview scheduled to 11:00 AM. During that week I had a lot of emotions and fears questioning if I was doing the right thing. I usually don't get nervous or light headed at all, even on very stressful situations (my style is to become aggressive), but that week I was different. At 11:00 AM I've met the HR person that was going to do my exit interview. She was a beautiful woman (I think they do that so you regret you are leaving). She was very interested in understanding why I was leaving, what did I think of MSFT, my manager, my team, the future, etc. I was treated respectfully and she never talked about my non-compete, NDA, company property, etc. At the end of the talk she asked for my badge and that was it. I was officially unemployeed. Turning over the badge was a very symbolic moment in my head. It meant I couldn't unlock the doors of Microsoft building anymore. It meant I was an outsider. It was just about noon. I went to my car and had lunch with my wife (which works at MSFT, btw). The next day I was relieved. I felt free. It immediatelly gave me a boost of energy to find out what else is out there. What technologies I was missing. What was the real world like. A few days later we went to Brazil to visit family, and when we came back I did a small social network project for a month (I called it my warm up for Sampa), and by early February I started writing the first line of code for Sampa. 
December 2
, 2008
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08:38 PM
Until recently I had about 170 followers on Twitter. I knew the vast majority of them in person and except by a handful, the rest of them I knew by name or had exchanged email. I also only followed people that I know. Then a popular blog wrote about 30 entrepreneurs to follow on Twitter and somehow they listed me (I still don't know why). That added about 50 people to my "following" on Twitter. I think that's wrong. I believe the best way to use Twitter is not to follow people that are interesting, or influential, or controversial. You'll get the most value (and fun) out of Twitter if you only follow people that you know. That makes it a more dynamic communication mechanism. Half of my tweets are local (to Seattle), are about me, my life, my car, my family, etc. How's that going to add any value to some tech entrepreneur in Boulder? If you want "great insight" into startups, technology, building companies follow my blog (or the Seattle 2.0). That's where the good stuff is, but don't follow me on Twitter unless you know me personally or we have friends in common, so we are likely to bump into each other in the near future. 
December 2
, 2008
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01:20 PM
I just made up my mind about my New Year Resolution for the coming year. Instead of having a resolution that I would have to fight for an entire year, my resolution only applies to January 1st, 2009. My resolution is to have zero emails on my inbox at any point during the day of January 1st, 2009 on my three primary mailboxes. I'll get it done! Even if I need to delete all messages without reading it. 
December 1
, 2008
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09:49 AM
About 7 months ago I wrote about a website dedicated to get people to stop using IE 6 called SaveTheDevelopers.org. Over the weekend one of the readers of my blog (thanks Renan), asked what happened to the website. Without much context I didn't know, so when I went to check it this morning (drum rolls)... it redirect to Microsoft Internet Explorer official download page, with the IE 8 Beta download being the most prominent call to action. This begs several questions: Why did Microsoft buy that grassroots initiative? Were they unhappy with its traction and people critizing IE 6? Were they worried about backlash from the development community? Or, did Microsoft even buy that domain? Maybe the owner is just redirecting to Microsoft to make it look like they are silencing community criticism. The last option seems to be the most likely case since the domain SaveTheDevelopers.org is not registered to Microsoft. Or maybe Microsoft did buy the domain but used a proxy to avoid any association with the redirect. So many questions. 
November 20
, 2008
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05:05 PM
Michael Arrington just made a mistake in claiming that Outlook 2007 is the most popular feed reader of subscribers of TechCrunch. FeedBurner has very limited ways to measure subscribers and most of those are significantly flawed. On this case in particular I'll only pick on the Outlook 2007 issue. I believe the Outlook number is probably 3 or 4 times smaller than reported by that graphic. So, instead of having 519,904 subscribers from Outlook 2007, TechCrunch probably has only 130,000 or so, making it the 4th most popular source of subscribers. My case is based on how FeedBurner can compute unique readers. On the case of Outlook 2007 (or any email app), you are stuck between a rock and a hard place. Outlook 2007 doesn't send cookies. So, there is no way to do a similar unique count like Google Analytics does. The only number FeedBurner could use is the IP address. Now think about your typical TechCrunch reader (no, they are not developers). They are your regular corporate Joe. And what Joe the Employee uses as a device to carry his work? A notebook! You know, those little computers you carry around, sometimes called a laptop. Now, this laptop will know at least 2 IP address for sure. When it's at the office and when it's at home. But how about when you are having coffee at a Starbuck or Tully's. Well, that's another IP address. What about when you are at the airport, hotel or library... Another 3 IP addresses. I have no data to back it up, but it's fairly reasonable to assume a laptop sees 3-4 or even more IP addresses per week. This problem doesn't apply to Google Reader, BlogLines or any other online reader. It might not apply to other offline readers that support cookies as well, but who knows. The bottom line is that you should never trust in a piece of data if you can't validate the assumptions behind it. 
November 18
, 2008
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04:08 PM
I looks like is the perfect time to trim the fat and to get rid of the unwanted from your company since you can always blame the economy. I don't mean to pick on CarDomain exclusively (I should pick on more startups), but the real reason of the layoffs is not the downturn of the economy, although that might have been the tipping point. The real reason is a failure to maintain traction with the customer base. The numbers don't lie: 
November 13
, 2008
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04:58 PM
I’ll spare you the long story of my life and how I’ve got to be above average when detecting BS on projections and assumptions (financial or not). But there are a few rules of thumbs that you can use to quickly validate some assumptions on your own projections or on someone else’s projection in case you are an investor. Each industry is significantly different from the other as to assumptions not being easily transposed. So, mostly of what I talk here only applies Web-based consumer services. On the same note, unless two companies are on the exact same market, have the exact same positioning and exact same product, it’s hard to say that everything you know about company A applies to company B. So, whatever you do, you have to figure out how to validate assumptions on a case-by-case basis, however, there is the bullshit line. This is line that anything above it (or below it) is guaranteed to be BS. The most easy BS threshold to detect is the growth of X, where X can be users, page views, widgets, etc. If someone tells they expect a 30% month-over-month growth for the next 2 years, you just detected the BS line. Why? Simple math. A 30% growth M-o-M for 2 years would mean a 41,654% growth in 2 years. That’s like saying you have 100,000 users today and in two years you’ll have 41 million users. Of course, the most used argument of a BS projection is to talk about examples like YouTube or Facebook. Here are some simple direct numbers (BS lines) that you can use to validate your projections or your portfolio company projections that I use myself (see some exceptions after the list): - > $10 CPM (at niche): On the context of web advertising, even highly targeted ads are very unlikely to reach above $10 CPM. You’ll hear a lot about how the price of ads will go up, how profiling data on users will help drive up the price of ads, yada, yada. Above $10 CPM is BS to me.
- > $4 CPM (at generic): On generic audiences website, it’s nearly impossible to get more than $2 CPM, and most sites are below $1 CPM. There is a step function in terms of volume and price because you can negotiate better rates (even w/ Google) if your volume gets really big (> 20 MM PV), but still, you won’t be getting $4 CPM for a photo-sharing site or any other kind of generic service.
- > 20% Conversion Rate: Defining conversion rate as the number of people that sign up to your service divided by the number of people that visited the website cannot be above 20% and more likely will be between 5 and 10%. I can give you many reasons why this is true (another blog post), but if you think you’ll be getting more than 20% conversion at a high volume, stop.
- > 5% Conversion to Premium: If you are on a “freemium” model it’s nearly impossible to get past the 5% conversion to premium of sign ups (notice: that’s 5% of the sign ups, not 5% of the visits).
- < 50% Churn of New Users: If you are offering a free service, a free-trial or a freemium (free w/ ads or paid), you should expect a huge churn of new users. People might just be evaluating your service, they even might have been mislead into believing your service is a duck while it’s just a chicken by your hyperbolic marketing material. Either way, if your model projects a churn of new user of less than 50% I call it BS.
- < 3% Churn of Active Users: The biggest problem with projections of churn of active users is not low numbers, it’s that is not even modeled. People think once they get a user, they get a user for life.
- > 10 visits/UU/month: Really? You think you can get each user to visit 10 times per month? On *average*?!! Yikes.
- > 30 PVs/visit: I love web stats and this is one of the most interesting ones. 30 PV/visit is impossible (see exceptions), and even that number is ridiculously high. More likely a site will have 5 PV/visit on average, anything above 10 PV/visit is suspicious, above 30 is BS. And the more your site’s traffic depends on referrals from search engine, the closer it gets to 1 PV/visit.
- $0 Customer Acquisition Cost: Ah, what the heck. Your site is super-duper viral and signing up just 1 user will bring another 100, that will bring another 10,000, that will bring another 1,000,000… Yay!
The list above are the most obvious data points, and probably most used, on Excel spreadsheets all over the word trying to justify a business model. Feel free to complement or disagree with my list on the comments. Exceptions: Mostly you can apply these rules to any web-based consumer service, except communication services, like email, IM, chat, forums, etc., because they have very high number of return visitors, high number of PV per visit, etc. On the flip-side, the CPMs for those service take a nose dive.
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