there is plenty of interest and a few commitments from a kaleidoscope of investors. of course we’ve had our share of rejection. here’s what i’ve learned in the past few months, there are THREE reasons not to invest in us:

1. we are NOT in the bay area
2. we have hardware
3. we’re in a crowded market

this is the absolute freaking truth! this isn’t a rant about how VC’s operate or think. these are three legit reasons not to invest and almost all the angel’s and vc’s who’ve passed have used one, two or all three of these. there are great advantages for being in the bay area; it’s track record for successful startups speaks volumes. hardware can eat your margins like the cookie monster eats cookies. of course we’re about to go head-to-head against great companies like amazon, dropbox, crashplan, sugarsync and others.

eric paley wrote a great article on conviction and w/ each “pass” we’ve learned something more about our own conviction. we’ve also learned a few truths too. here are three reasons to invest in us:

1. we’re NOT in the bay area
2. we have hardware
3. we are in a crowded market

it’s simple, we’re not another groupon knock-off or iphone photo sharing app. we live at the foothills of the greatest ski resorts in the world (this makes for a great lifestyle) and between two great universities producing great “stable” talent. as for hardware, this is how one investor put it: “hardware is the new software … just look at apple”.  lastly, google had a pretty crowded market when they started. how’d they do?

there are plenty of other great reasons to invest in us, including our disruptive product vision, our hunger for success, our teams great technical experience and end-user focus to name a few.  we look forward to the days and weeks ahead; hopefully it’s days not weeks before we close our seed round. raising cash is such a *bleeping* distraction!

in our first 24 hours (just guesstimates) we had around 50 followers and half a dozen intros. over the weekend we doubled the number of followers and tripled the intros.  we’ve had emails from investors that have skipped the angel list intro and found our emails through their own contacts. we’ve got wall to wall meetings and each investor we talk to opens more doors through their network. it’s mind boggling. it’s crack cocaine for startups!

tips that worked for us:

1. don’t be in a rush to publish a profile. take some time to work out the details.  our site went down just before we published our profile. that sucked!
2. have a ton of people look over the details and proof read. try to make it entertaining, but clear and concise.
3. have a great advisor w/ great connections. this will help to get the ball rolling. our advisor, jason calacanis, has been tremendous in this regards.
4. send all your current investor contacts to your profile, ask them to follow or comment on your profile. ask them for introductions to other investors.

Keeping these devices in sync is driving us crazy … We have a great solution for this problem. We are going to demote the PC to just be a device. We are going to move the digital hub, the centre of your digital life, into the cloud. -Steve Jobs, WWDC 2011

for apple-fan-boyz-worldwide this was the coup de grace to tyranny of the filesystem and the chains of device-bigamy that we’ve endured all these many years (first gen iphone circa 2007). iConvoluted does not pack the punch Steve-O thinks it does and won’t become the primary storage we so yearn for.

first let’s call a spade a spade! sync is nice and i’m not arguing  having to not plug my phone into my macbook pro won’t be nice, but sync is not storage. sync is nice for app data like contacts, documents and muzak (small collections). there’s one itty-bitty problem w/ the iClown strategery: 5gb won’t suffice. it’s actually a huge problem!

but that’s not what apple says on their website! yeah, i know i read that crap too. consider this, of the 100gb or more stored online by a mozy user only 1/3 of that data is muzak & documents. what? so what’s the other 2/3rds of data? video & photos. much of the storage explosion we are seeing is caused by user generated content (HD home video & photos); it’s not the stuff you’re buying on iTuna.

for primary storage to be, uh, primary, it needs to first meet the consumption needs of the user. i have come up w/ an advanced formula for this: LOTS + CHEAP. i have a hunch users will be paying around $40 a month to store 500 gb. second requirement, primary storage must be platform/device agnostic! something Jobrz will never give into. i’m a mac user and i use google docs; i don’t see this changing anytime soon. what happens if i switch to android or don’t by media from apple? third, primary storage requires access anywhere & anytime. take a look at apple’s iToxic page and tell me what is says about streaming your muzak library from iCan’t. i have +100gb of music across multiple devices and not being able to stream to any device is simply not anywhere/anytime access. FAIL!

what Jobs meant to say was, “don’t you hate having to sync all the data you buy from us to the devices you buy from us? take it to the cloud!”

consumer cloud space is getting crazy with the likes of amazon, google, apple and others fighting fiercely. i recently heard a pretty smart VC say he’s sitting on the sideline b/c he doesn’t know what’s going to happen in this space. but aren’t VC’s suppose to be gamblers that calculate risk for a living? why not bet on companies that disrupt the fundamentals of cloud storage (Lots+Cheap) and build a product w/ the network effects you get w/ products like dropbox or facebook?

we want dirt cheap online storage we can access from any device via the “interwebs” and can stream & share w/o a hitch. oh did i mention dirt cheap? plz.thx.

in 2008, i didn’t think every smartphone would have an HD camera come standard within two years; i suspect Cisco didn’t see that either. but Cisco did see how the flip was going gang-busters with young mom’s recording thousands of hours of family video, posting on blogs and sharing w/ friends and family w/ little effort.

so did Cisco buy flip to get into the consumer camera business or sell more switches and routers? i argue they did it for the latter. sell more flip camera’s and overtime you’ll sell more switches and routers to ISP’s and other interent related businesses.

if this is true and Dan Frommer’s theory that the iPhone killed the flip then Cisco still wins! as long as something replaces the flip in the grander strategy, which smart phones shooting 720p and soon-to-be 1080p do, then Cisco will continue to provide switches and routers to ISP’s and others trying to keep up w/ the increased sharing of video over the interwebs.

my two cents on the death of flip.

though youtube has been around for a while, interent video is again becoming the new frontier of the web and companies like netflix, pixorial, vimeo, mobiclip and others are creating new ways to leverage the second coming of video.

what’s spawning this data hoarding? photos and music still command 1/4 – 1/3 of data on a consumers harddrive, but video is now the dominant file types; anywhere from 1/3 – 1/2 of total space.  with new devices like the flip camera and HD video cameras on any new smartphone. it’s no shocker that a mom or dad can shoot a couple gigs worth of video at one soccer game.

it’s no surprise that mozy killed their unlimited plan. i don’t think the majority of their customers even come close to 60 gigs, but the writing must have been on the wall.

how much data do you have?

mozy & carbonite stop unlimited storage upload.

mozy recently killed their unlimited storage pricing plan and replaced it w/ a pay per GB model (125 GB’s for $9.99 a month and $2 more for each additional 20 GB).  no doubt this was an attempt to make users w/ more than 100 GB of data pay their share. 100 GB’s doesn’t sound like a lot of data these days w/ HD video cameras in almost every smart phone and with music & movie collections growing too. under the new mozy program i couldn’t afford to backup the +200 GB’s i have on this laptop.

in all fairness, i wouldn’t use carbonite either. they throttle your upload after 35 GB’s, it would take you 3 years to upload a terabyte of data to carbonite if you could keep your connection and service running 24×7.  much like mozy they hate the unlimited model too.

so after the dust settles how many customers leave mozy? 10,000? 20,000? i argue the dust won’t settle. they’ve slashed off their users w/ the 100′s of GB’s of data today, but how many users will grow to exceed 100 GB’s by the end of the year and so on? data center and/or business operational costs have got to become inversely proportional to the rate of data growth by users in order for cloud economics to make sense. i don’t see it happening.

like i’ve always said, “mo’ data, mo’ problems”.

wilson describes 8 areas a startup should focus on long before they begin burning marketing money; find the free users before you spend to acquire users. his second and third points resonated the loudest for me. launch amongst an influential community of like mind people and own your story through PR. theres more to each of these points, so go read them.  but it got me thinking, if you are a bunch of engineers w/ little marketing experience how do you hire someone to do your marketing?

b/c this is a blog you can expect an over simplified solution, so here is mine:

first, ask any candidate this simple question: what is marketing? if they mention the phrase “generating sales” or any derivative of the like just cross them from your list. likewise, if they don’t mention the word branding in their response just cross them off the list. to get an idea of what i’m talking about pick up the book The 22 Immutable Laws of Branding.

second, determine the viral coeffecient of your candidate (don’t know what the viral coeffecient? try the Google). give your potential candidate a project to demonstrate his/her ability to build brand awareness, drive traffic, have real people engage in something and do it in a short period of time like 72 hours.

e.g. have them generate a product survey for your new product or service and see how many potential users they can get to fill out the survey. of course if they are natural influencers & marketers they’ll use social media, email contacts, friends, family, blogs and the likes to get engagement. getting your first 50 or 60 responses should be pretty easy. getting more than 300 in that period of time then just write them an offer letter.

other interesting projects could include building an affiliate program, write a PR story and get a popular media figure to run your story, generate buzz in the blogosphere or particular community.

i’m a huge advocate of project based hiring; it’s like a test drive for potential employees. i also believe in finding employees who roll up their sleeves and get to work. they don’t need budget and headcount to get the job done.

back a few months ago when i was first interviewing w/ backcountry and thinking seriously about a jump from mozy a friend of mine asked why i would even think about ecommerce “it’s not very bleeding edge”. at least compared to the mozy distributed file system (20+ petabytes, processing power, redundancy & protocols) or other cloud computing services an ecommerce platform lacks the blood.

but maybe my friend is wrong … first of all i’m sorry for using “cloud computing” it’s a buzz word like web 2.0 that won’t go away because no other pithy definition exists for distributed web application and storage environments exist. however, over the past few years ecommerce has been influenced by social applications like facebook, twitter & the variety of blogs out there. of course the subject of “community” and “conversation” , which are enabled by the above mentioned applications, but now the bleeding edge for ecommerce companies and the googles of the world is to create context through implicit/explicit actions and crunch models to provide rich experiences online.

a negative example: i buy a lot of things from amazon, but why do they keep recommending Nintendo Wii games to me. i’ve not bought a Wii game from them in over a year? at some point that should decay from their recommendation algorithm and move on.

backcountry.com is a great catalogue, but it’s not a great user experience. i’m excited to tackle this challenge. as of today i’ll be working product management for community projects, content surfacing and all things bike (realcyclist.com & hucknroll.com).  ecommerce, not so old hat in my opinion.