The cover story in Wired Magazine - Why Craigslist is Such a Mess - has garnered a lot of attention.

It would, given that Craigslist (CL) is one of the true internet success stories - reported annual revenues of $100M and just 30 employees. Can you say 90% (net) profit margin? Amazing.

Of course, it’s impossible to separate the story of CL from the story of CN, AKA Craig Newmark, its iconic founder.

CN has been called many things:

• Visionary (…a free marketplace for all)
• Stubborn (…no, we’re not changing the UI)
• Genius (…90% profitability)
• Entrepreneurial (…you did that with no VC?)
• Foolish (…revenues could be $1B)
• Naive (…people are good?)
• Plodding (…the site is ugly and dysfunctional)

Sometimes all these things at once! It’s really entertaining to sort through the armchair analysis, replete with mucho revisionist history.

When I think of CN and try to categorize him (as if that’s fair), I think of two things: “force-of-nature” and “other-worldly.”

CN and his List are a hurricane - nothing can stop it and it seeks neither permission nor blessing. It just goes. And destroys (newspapers). And envelopes (small, local economies). And displaces (eBay). And CL is like the sun, providing opportunity for growth and commerce where none existed. It does these things on its own terms.

CN himself elevates “business” to the spiritual. He can’t really be bothered by detail (business models, GUI design, etc.). Nor can he be distracted by riches or (for the most part) fame. To him and his messianic world view, the world exists as a canvas to do “his thing,” to do good. And the good people of the world reciprocate.

Sounds “saintly,” does it not?

Why would we, in general and through the agency of Wired, cast stones at such a thing?

The answer, of course, lies in human nature and is probably rooted in the first deadly sin. Maybe CN, so right about so many things, got this part wrong…maybe we’re all not entirely “good.”

Written by Bob Walters

You can’t declare the recession over just because the stock market goes up or unemployment acceleration decreases. [Fox News, it figures.]

In judging the matter, let’s at least stick with the accepted definition!   [SF Examiner, better.]

Of course, not everyone is into the mania.  [AOL, best?]

The downside of shoot-from-the-hip economics is looking the fool. Just ask the authors of these 1930-1931 pronouncements!

BTW, my own opinion on this issue is kinda agnostic - I hope it’s over but think we lack the proof!

Written by Bob Walters

The Solid State Disk (SSD) - AKA flash disk - is a thing of beauty.

And since all desktop/laptop operating systems and app’s are horribly bloated, they take several minutes (feels like hours) to reboot. Yes, even Linux and OS-X.
Enter the SSD. Makes things happen in a flash! [Sorry, couldn’t resist the pun!] Heavenly.

But all SSD’s are not created equal… I just installed a mid-grade SSD in my home Mac Mini. Definite speedup for the Mini, but nothing like the blazing speed in my flawed-but-adorable MacBook Air.

Google the topic before buying. Oh, and you really can live with a smaller home drive….

Written by Bob Walters

If this is the ‘professional’ news version…then how close to reality are the blogs and other user-generated content (UGC) in reporting the news?

Seriously, what do you think really happened at that event? The conflicting stories make it impossible to tell. In fact, I guessed wrong. To find ‘the truth,’ read the NYT transcript. It’ll take 5-10 minutes, but is a very entertaining way to learn something important (IMO).

In the referenced post, Larry Cheng of Fidelity Ventures presents a fascinating look at modern journalism.

In the shadow of Mr. Cronkite’s death, we find ourselves in an American culture that has seemingly lost interest in facts - they are just not entertaining enough.

Our news providers, therefore, are forced to compete on commentary and/or slant. In this race, unshackled by any journalistic constraints, UCG holds a distinct advantage.

So how much can we blame the pros for slanting things, just a bit?

Note: I’m not blaming anybody - just stating the facts…

Written by Bob Walters

Well, the world of “free” (as in beer) and the “fremium model” has a new Bible. It comes in the form of a ground-breaking (OK, at least ground-retilling) and controversial new book - “Free” by Wired Editor-in-Chief Chris Anderson.

Perhaps the best news is that you can read it for free! Click here.

Naturally, the blog-o-sphere is atwitter (so is the Twitter-dome) with the news, with one of the most lucid threads appearing on Fred Wilson’s insightful blog. As is often the case, much of the ‘goodness’ is in the comments and their links.

Recommended. Suggest starting with Fred’s blog and going on from there. Enjoy!

Written by Bob Walters

Well, it seems that many things in life come in streaks. And press coverage is one of the leaders of that pack.

So, in the space of a week or so, we have my conversation on CNET and a clueful article on GigaOm (written by a VC, no less! ).

The former provides an update on how Untangle is doing, and why we’re doing it. The latter article, which reflects on strategies such as ours, explains why the small business’ market is so important to would-be IT vendors. If you scroll down a bit or click here, you can see my comment on the matter.

We at UT think that we are serving a vital role by providing great software at fair prices to small business. We are growing well with this focus. And, later this summer, we’ll be releasing a cool product that should (at least) triple the adoption of our software. Stay tuned….

- Bob

Written by Bob Walters

Our web content filtering (WCF) applications, Web Filter and eSoft Web Filter, are among our most popular offerings.

This demand is well-founded, as such practices have been shown to increase both productivity and regulatory compliance.

But there comes a point where the products can be abused, and a far point where they signal something even worse.

Rest assured, we are troubled by the recent news from China - that all computers must ship with state-controlled WCF in place. That alone is alarming.

When coupled with allegations of its uses, to squash all news of the Dalai Lama and Falun Gong movement, the new use of filtering becomes downright chilling.

WCF isn’t the first of mankind’s tools to be re-purposed with ignoble intent; it’s simply the latest.

Written by Bob Walters

In today’s world, getting a blog up-and-running on the internet is pretty easy - for a geek! OK, even for a non-geek. There are even a lot of moms blogs. But could my mom do it?

A year ago I’d have said “maybe.” Now it’s “absolutely.”

Why? What changed?

In today’s enlightened internet world, if you can email you can blog!

The way to start is Posterous. Just follow the instructions. Don’t worry about doing anything wrong - it can all be fixed later. I created and posted to “Post-Untangle” in about a minute. Nothing is faster.

I know that some of our customers and partners want to blog. The bar has now been lowered…go for it!
[Neither I nor Untangle has any ties to Posterous - it’s just cool and useful tech.]

Written by Bob Walters

The internet has been abuzz with proclamations and conversations about the imminent demise of venture capital (VC). The clamor began to escalate late last year, and has been building throughout this year. Much of the problem has been the result of a perfect storm of causal factors, among them:

• The economy. Duh. The effects of the downturn hurt from many directions:
• Sales in VC-backed companies are down, dragging valuations and extending timelines
• LP’s (the “big guys” who invest in VC) are feeling the crunch - less of their money is available
• The big wins that characterized the late ’90’s are falling out of the 10-year accounting window commonly used as a scorecard for VC performance (this is a “Y2K-level” event for VC).
• Acquiring companies are strained for cash, and their own equity is devalued
• Scalability Limits. There’s just too much money chasing too few high-growth deals (for a particularly interesting view of this, see Fred Wilson’s article and its comments)
• Regulations. Laws like SARBOX raise the bar for IPO’s to historic levels
• More…

But we entrepreneurs share some of the “blame” as well - the scale of innovation in relatively mature segments like “IT,” “biotech,” and (even) “the Internet” has slowed. That’s on us, perhaps, or perhaps it’s just the reality of maturing markets. By the way, notice that I said “scale” of innovation, not “level” of innovation. Innovation is alive and well. It just has less purchase in the market - too much has come before it.

So now the “punch line”: How much should we worry? Will there be money to fund our next deals, to create the next Untangle?

Here’s my own personal opinion, embodied in my predictions:

• The availability of VC funding in IT has peaked. It’ll never be the same, at least not unless some unforeseen  “discontinuous innovation” occurs.
• The VC class will survive, and even thrive - but there will be fewer players. The top quartile of VC’s provide excellent return for LP’s. The bottom quartile does not. Guess what’s going to happen?
• Worthy deals (and entrepreneurs) will get funded. Marginal deals will not.
• A new class of high-tech entrepreneurship will evolve, one far less dependent on VC’s. This is already happening, primarily in web deals. This back-to-the-future class will resemble Silicon Valley startups like privately-held Monster Cable (profiled in this CNN/Money article).

So I’m not worried about funding the next “Untangle.” Which is good, as I have plenty to occupy me with this one!

Written by Bob Walters

OK, I admit it. I was totally drawn in by the provocative title of James Governor’s post. It was that “pathology” word that got me. According to Meriam-Webster:

pathology

Function:

noun

Inflected Form(s):

plural pa·thol·o·gies

Etymology:

New Latin pathologia & Middle French pathologie, from Greek pathologia study of the emotions, from path- + -logia -logy

1: the study of the essential nature of diseases and especially of the structural and functional changes produced by them  2: something abnormal: a: the structural and functional deviations from the normal that constitute disease or characterize a particular disease b: deviation from propriety or from an assumed normal state of something nonliving or nonmaterial   3: deviation giving rise to social ills pathologies…and crime

Well, it’s easy to see that I could have a load of fun with these! After all, I have a decades-long history of the gladiatorial combats that James and the linked material describes. That notwithstanding, a major point made in the article(s) centers on the inequity of the perpetual license model (sometimes incorrectly called the ‘enterprise license’ model). Presumably, the answer is software-as-a-service (SaaS) and its pay-as-you-go pricing model.

Let’s take a look at each pricing strategy, and the benefits and drawbacks of each…

(more…)

Written by Bob Walters