Claus.dahl

A commentator on Bloomberg, Princeton student Evan Soltas, writes that Bitcoin is an “existential threat to the modern liberal state,” a line that can be read in two ways. One reading of his op-ed suggests we are all in danger and that the inability to tax and track bitcoins will result in a thriving black market and reduced fiscal control that will be disastrous for all of us. Taken another way – and given Soltas’ biases, I suspect he’s focusing a bit more on the “liberal” part of the title versus the “modern” part – it suggests that the modern nation cannot afford to fritter money away on the welfare of its people because it will no longer be able to tax the rich unfairly, leading to a fiscal nirvana for men and women of a certain breed. Either way, it’s a goofy way to look at what will remain, for the time being, a blip on the economic radar.

There have long been ways to transfer money anonymously. Ad hoc networks, most notably Hawala, have allowed relatively seamless transfers of wealth for centuries. Further methods have consisted of the condensation of wealth into precious metals, jewels or jewelry – a sort of money ZIP file that has allowed all manner of misdeeds to thrive between borders.

Each of these methods have been seen as a way to launder money, support wars and help war victims, and, as Soltas notes, build an “existential threat to the modern liberal state.” The FBI, for example, says that “the way it creates, operates and distributes bitcoins makes it distinctively susceptible to illicit money transfers.” The same can be said of a $20,000 watch that someone wears over the border and resells when he lands.

Bitcoins still require a way to convert the virtual currency into something you can spend in the real world. While you can buy a Porsche with bitcoins, I doubt the service will become sufficiently popular that every merchant will have a wallet at the ready for your next Slurpee purchase.

Instead, Bitcoin represents a new part of the economic engine. As it stands, trusting, say, a wallet service or your own computer to hold millions in bitcoins is a risky proposition. The transfer may be seamless but the extraction will be hard. While I find it laughable that various federal agencies will be able to track the inflow and conversion of funds from a bitcoin transaction programmatically, an intrepid auditor should be able to raise a red flag when you have $100 one day and $20,000 the next – unless you keep your cash in turbulent bitcoins or less turbulent cash.

This talk of the destruction of the modern banking system is akin to the talk about 3D-printed guns: it’s an interesting aside but it’s still far easier and cheaper to just do things the old-fashioned way. If Bitcoin becomes truly seamless and relatively solid, I could see some cause for worry. As it stands, it’s a cool way of doing something that has been done for centuries before and it’s definitely something to watch.

lostconversations:

AAAAAAHHHHH ADMITTED TO COOPER ART 2017!!!

What did i do though.

You are, in all likelihood, the last of your species. So make sure you treat it more like the jungle and less like a zoo. 

““Attackers wait until the price of Bitcoins reaches a certain value, sell, destabilize the exchange, wait for everybody to panic-sell their Bitcoins, wait for the price to drop to a certain amount, then stop the attack and start buying as much as they can. Repeat this two or three times like we saw over the past few days and they profit.””

-

Sci-fi writers, you’re supposed to think this stuff up before criminals do:

Dual cyber-attacks hit Bitcoin virtual currency systems — RT News

Det er et virkelig godt interview med William Gibson i dagens Politiken. Han skriver bl.a. om hvordan ordet 'computer' formodentlig om 30 år vil være nærmest umuligt for unge at forstå, fordi regnekraften i disse år synker ind i tingene, og det der regnekøleskab, som vi andre netop havde vænnet os til var fremtiden, helt er forsvundet igen, som en parantes i historien.
Hvis man har læst Don Norman vil man huske en klassisk annonce fra anno dazumal for "elmotoren til hjemmet" fra dengang kraft ikke bare var en bestanddel af alle de andre ting vi har i hjemmet, og forstå at situationen med den rene computer er helt analog til denne.
Man kunne naturligvis læse netop den pointe i mit essay om kontoralderens afslutning (pdf, p. 14 og frem) i mit og min mon brors one-off magasin tilbage i 2001, men Gibson får sagt det dejlig klart.

Det er internettet, der har gjort det, mere end miniaturiseringen af computeren, beregning kan flyttes nu, hen bag en hvilken som helst overflade vi synes, og på den måde bliver en lille smule beregning i alting pludselig relevant fordi vi kan hægte det op på en hel masse baggrundsberegning ude i skyen, og så smide det ind på en vilkårlig overflade i nærheden af os. Vi kan flytte det i tid og sted, og omgøre den berømte kliché om det intelligente køleskab til en fancy altid-korrekt indkøbsliste vi ser på en af vores glasoverflader.

Overflader. Det er det andet interessante i interviewet - der spørges til de overflader Gibson har været optaget af og endda selv skabt; overfladen cyberspace f.eks. Gibson er meget bevidst om - og tak for det - hvor overfladisk science fiction egentlig er, hvor utrolig forkert meget vås fra science fiction bøgerne er, og han er bevidst om hvordan han selv har brugt sine forudsigelser: Det er billeder. Ikke ting, begreber, teorier, men lige netop billeder - overflader.

Det er ikke for at rakke ned på sci-fi (måske lidt på den trælse omdefintion af SF som Spekulativ Fiktion), for overflader er vigtige; de er en central bestanddel af verden omkring os, og til syvende og sidst grunden til at vi snart vil glemme den rene computer; som overflade er den uinteressant - med mindre man er en af os, der bygger den om, og det er gået med den som med alt andet der er blevet gjort billigere og billigere og vigtigere og vigtigere - den er sunket ind i virkeligheden.

From Tom, who is my old friend and long-ago writing partner, and to whom I am grateful for capturing this essential truth:

telia:

Roger Ebert died a couple of days ago and for some reason I felt sad. Like sadder than I should’ve felt. Like kinda-almost-maybe-coulda-cried sad. Definitely in the heavy sob zone.

Now, I liked Roger Ebert. But no way did I like him to that extent. I mean, while I did follow him on Twitter, I didn’t read his reviews anymore and and I hadn’t watched “At The Movies” for years – and I mean years – when I would watch it with my dad.

And that’s when the coin dropped and the pinball machine went tilt in my head.

Since my father died almost twenty years ago, about once a year, I get hit with a wave of sadness that does not equal the magnitude of the event that triggered it – like, say, news of a movie critic passing away. I’d often chalk it up to the weather-like movement of the blahs or having a case of the Blue Mondays. Some neurons crossed the wrong way for a minute. No harm, no foul, and after a minute I’d be fine.

But when I thought more about it yesterday, I realized that most of those events were somehow connected back to my father. The closing of a random Chinese take-out joint. The retirement of an old baseball player. The passing of a film critic.

Roger Ebert said “we’re all dying in increments.” But the way his death triggered a reaction in me, I realized that the dead also die in increments. Everyday, things that hold memories for us of others slip away. A bookstore closes. An old house that was red gets painted blue. Roger Ebert dies. And the things we went back to – subconsciously or consciously – to remind us of someone start to disappear as well. And that’s kinda-almost-maybe-coulda-cried sad.

But, the bright side (and there is a bright side), is we also continue living in increments. How crazy is it that we pass something of ourselves onto seemingly inanimate objects? Or TV personalities that we’ve never actually met? They hold something of us for the people who know us – and hold the key. Like one of those old lock boxes in train stations. And that makes me kinda-almost-maybe-coulda-smiled happy. And definitely worth a thumbs up.

The question then becomes – what memories are you unconsciously creating for others? What people, places, and things are you loading with meaning that won’t fully sink in until you ship out… or at least, move cross country?

the dollar is so boring compared to this  

Amazon Web Services (AWS) is dropping the price  of Windows On-Demand EC2 instances up to 26 percent, which is another clear sign of the price wars in the cloud computing market. The news follows Google’s announcement earlier today that it is dropping instance prices by 4 percent.

AWS says the drop in price continues its tradition of  exploring ways to reduce its costs:

This reduction applies to the Standard (m1), Second-Generation Standard (m3), High-Memory (m2), and High-CPU (c1) instance families. All prices are effective from April 1, 2013. The size of the reduction varies by instance family and region. You can visit the AWS Windows page for more information about Windows pricing on AWS.

AWS has extended its support for AWS in the last month with support for SQL Server AlwaysOn Availability Groups, a beta of the AWS Diagnostics for Microsoft Windows Server, and new drivers for our virtual instances that improve performance and increase the supported number of volumes.

Earlier today, Google opened Compute Engine to developers who subscribe to Google’s $400 per month Gold Support package. The package includes 24/7 phone support. Users can access Compute Engine without the need to talk to sales or an invitation.

Google and Microsoft have consistently been dropping prices over the past several months. In November, Google dropped storage prices by 20 percent.

For AWS, the price drops are consistent with its strategy. AWS believes it can use its scale, purchasing power and deeper efficiencies in the management of its infrastructure to continue dropping prices.

The market is diversifying and AWS sees a need to extend its dominance in the market. But with Google and new players in the mix, it’s unclear  how the strategy will pan out, as competitors offer a more high-touch type of service.

Editor’s note: Jeremy Liew is a managing director at Lightspeed Venture Partners. Follow him on Twitter @jeremysliew.

As a VC, my interest in the Bitcoin ecosystem is not ideological but mercenary. I see the opportunity for Bitcoin to disrupt multi-billion-dollar markets, but in doing so also create new big markets. There are three key markets in Bitcoin:

Wallet. Holding your Bitcoins for you, serving some of the checking account functions of a bank.

Exchange. Converting from USD to Bitcoins and back.

Payments. Helping merchants accept Bitcoins for their transactions.

As a rule of thumb, VCs like to see billion-dollar markets to get excited. How can each of these markets get to be a billion dollars in size?

Wallet

It is free to get your own Bitcoin wallet, a piece of software on your computer that you can use to send or receive Bitcoins. However, this entails storing your Bitcoin private key on your computer, which risks loss or theft. Increasingly many Bitcoin users are turning to hosted wallets, which hold the money for you, and are accessed over the web. But you have to trust that your hosted wallet will not run off with your money (which has happened before). Because client wallets are free, hosted wallets have typically been free, as well.

Let’s assume that one day in the future, hosted wallets will be able to charge 0.5 percent of funds in the account as an annual fee. This is likely a high estimate, but not impossible if the wallet offers enhanced security, insurance against loss, and perhaps some kind of escrow or other fraud purchase protection. For the wallet market to be worth $1 billion, this would imply that $1 billion/0.5% = $200 billion in Bitcoins would need to be held in hosted wallets. This means that the market cap of Bitcoin would need to be at least $200 billion, relative to $1.5 billion today. Bitcoin would need to appreciate by almost 150x to reach this level. Bitcoin has gone up by 30x in the last year, so that isn’t impossible to believe. Two more years like that would get you there.

Exchange

It will be a long time, and probably never, that Bitcoin becomes the default world currency. As a result, there will be demand for exchanging between Bitcoin and fiat currency for a very long time.

Consumer level exchanges charge between 50 to 100 basis points on each trade. Bigger trades currently pay closer to 10 basis points. Let’s assume that in the future trading commissions run around 25 basis points. To get to $1 billion in market size we would need to see $1 billion/0.25% = $400 billion in annual trading volume. Last month, exchange volume was around $60 million, this month it looks like it may get to $200 million. Annualizing this gets you to between $720 million – $2.4 billion in annual trading volume. Assuming the top end of the estimates, trading volume would need to go up by 200x current levels to hit this market size.

Transaction volume, i.e. transfers of Bitcoin within the real economy, has historically floated within a constant multiple of trading volume of between 2 and 20. If the relationship between transaction volume and trading volume remains roughly linear, transaction volume would need to rise by 200x current levels to hit our target $1 billion market size. This is believable given that transaction volume has gone up 30x in the last year.

Payments

Ultimately, the key driver of both Bitcoin price appreciation and exchange volume has to be payments volume. If people aren’t using Bitcoin to pay merchants for transactions, then there is no real economic driver for either price or exchange volume to rise. It would be driven purely by speculation.

One of the key advantages of Bitcoin is that it nominally has zero transaction costs. That being said, there are a number of additional merchant services that could be added on top of transaction processing that could justify 25 basis points or more in merchant fees. Bitpay today charges 1% or more. To get to $1 billion in market size, we would need to see $1 billion/0.25% = $400 billion in annual transaction volume.

Last month, transaction volume was around $250 million, and this month it looks like it is on track for $750 million. Annualizing this gets you to between $3 billion and $9 billion in annual transaction volume. Again, taking the top end of estimates, this would require an increase in transaction volume of around 50x current levels. In the last year, transaction volumes have gone up by 30x. As a comparison point, world GDP is around $82 trillion, so this would represent about 0.5 percent of all world transactions using Bitcoin. As a comparison point, $2.5 trillion is spent on credit cards per year in the U.S. alone out of $15 trillion in GDP, so about 16 percent.

How Do We Get There?

All of these market-sizing analyses require a 2 to 2.5 order of magnitude increase over current levels. Those same metrics have shown a 1 to 1.5x order of magnitude increase in the last year, so it doesn’t stretch the imagination to think that it might be possible. But the question is how? It would be impossible to get to those sizes on illicit usage only and you can’t get there just on speculation. Bitcoin usage would have to become mainstream. The only way to get there is through merchant preference because of the lower transaction costs. This could be appealing to industries with low net margins (e.g. grocery, Amazon.com), or with high transaction costs (e.g. cross border trade, micro transactions), and these may be the industries that pioneer Bitcoin acceptance.

But merchants won’t switch to Bitcoin for lower transaction costs if the tradeoff is volatility of exchange rates. As long as their costs are in fiat currency, they will want to switch out of Bitcoin and into fiat immediately when they take payment since they won’t want to bear currency risk. That requires deep liquidity in the exchanges, and this is where the professional traders come in. They have already started to enter the market.

If the current volatility in the Bitcoin exchange rate is reduced in the future, merchants may be willing to hold Bitcoins for longer periods of time, and even make payments in Bitcoins.

The other way that Bitcoin may become mainstream is in countries where the currency or financial system is already more volatile than Bitcoin.

Mainstream adoption will require bright line regulatory compliance by all elements of the Bitcoin ecosystem. That is why last month’s guidance on virtual currencies from FinCEN (part of the U.S. Treasury) caused Bitcoin prices to go up. As Bitcoin gets closer to the U.S. regulatory umbrella, it moves closer to legitimacy. These rules and the ones that will follow will increase the overhead costs of all players in the space, but that is a small price to pay for legitimacy.

What Does It Mean For Startups?

Not all big markets are opportunities for startups. Bitcoin has some attractive characteristics because it is so disruptive to the current system. The innovator’s dilemma may keep the big players in payments out of the market for a long time, as they may fear cannibalizing their current very attractive margins. But one day that competition will come.

The key questions for any startup are: What is your competitive advantage and how do you defend against a large late entrant? For exchanges, liquidity is the barrier to entry. Although there have been examples where new entrants have cracked open marketplace businesses, it is hard. For wallet and merchant services, it is less clear what the barriers to entry will be.

The risks associated with Bitcoin are worth mentioning as well. The six biggest hacking, theft and fraud incidents involving Bitcoin exchanges, wallets, or investment vehicles have resulted in a total 1.2 million Bitcoins being stolen, out of a total of 11 million Bitcoins in existence. This means that more than 10 percent of all Bitcoin has been stolen, and this does not include many smaller thefts and losses from individual wallets. Just this week, another wallet service was shut down after suffering an attack. Given this environment, Bitcoin startups cannot remain bootstrapped for long and will need to raise more substantial capital from VCs to mitigate these risks with better security and proactive regulatory functions.

In all the scenarios that I’ve painted above, Bitcoin prices need to go up by 100x or more. If that were the case, then maybe just buying Bitcoin is a better investment than putting money into a Bitcoin startup. You get plenty of upside and no execution risk, but it won’t be anywhere near as much fun.

Extreme Kidnapping is a company that offers a kidnapping service to those who want to know what it feels like for a few hours. GQ gave the company $1500 to kidnap Drew Magary.

Romeo slapped me hard across the face, much harder than I had been slapped all night. Then he shocked me with a stun gun. Then Cody doused me with cold water, which was the worst part by far. When you get hit with a stun gun, it lasts a second. When someone throws cold water on you, it makes you miserable for hours. I hadn't thought about cold water before this. I had thought about guns and billy clubs and knives. It never occurred to me how desperately I would want to stay dry. Now I would have gladly taken another jolt from the stun gun in exchange for a fresh T-shirt.

"I know this was originally meant to be a fake kidnapping," the voice said.

That's right.

"And I know that you guys did your homework on me, and that you know I went to prison for a while."

I do know that.

"But there are other things about me that you don't know, Drew. And the reason you don't know them is because you never asked."

Oh shit.

That was the moment it felt real. That was the moment I was paying for.

I loved his safe word.

Tags: Drew Magary

So this is interesting. Yesterday, CNET had a story revealing a "leaked" Drug Enforcement Agency (DEA) memo suggesting that messages sent via Apple's own iMessage system were untappable and were "frustrating" law enforcement. Here's a snippet from that article:

Encryption used in Apple's iMessage chat service has stymied attempts by federal drug enforcement agents to eavesdrop on suspects' conversations, an internal government document reveals.

An internal Drug Enforcement Administration document seen by CNET discusses a February 2013 criminal investigation and warns that because of the use of encryption, "it is impossible to intercept iMessages between two Apple devices" even with a court order approved by a federal judge.

CNET posted an image of the letter: In reading over this, however, a number of people quickly called bullshit. While Apple boasts of "end-to-end encryption" it's pretty clear that Apple itself holds the key -- because if you boot up a brand new iOS device, you automatically get access to your old messages. That means that (a) Apple is storing those messages in the cloud and (b) it can decrypt them if it needs to. As Julian Sanchez discusses in trying to get to the bottom of this, the memo really only suggests that law enforcement can't get those messages by going to the mobile operators. It says nothing about the ability to get those same messages by going to Apple directly. And, in fact, in many ways iMessages may be even more prone to surveillance, since SMS messages are only stored on mobile operators' servers for a brief time, whereas iMessages appear to be stored by Apple indefinitely.

That leads Sanchez to wonder if there might be some sort of ulterior motive behind the "leaking" of this document, done in a way to falsely imply that iMessages are actually impervious to government snooping. He comes up with two plausible theories: (1) that this is part of the feds' longstanding effort to convince lawmakers to make it mandatory that all communications systems have backdoors for wiretapping and (2) that it's an attempt to convince criminals that iMessages are safe, so they start using them falsely believing their messages are protected.

Which brings us to the question of why, exactly, this sensitive law enforcement document leaked to a news outlet in the first place. It would be very strange, after all, for a cop to deliberately pass along information that could help drug dealers shield their communications from police. One reason might be to create support for the Justice Department’s longstanding campaign for legislation to require Internet providers to create backdoors ensuring police can read encrypted communications—even though in this case, the backdoor would appear to already exist.

The CNET article itself discusses this so-called “Going Dark” initiative. But another possible motive is to spread the very false impression that the article creates: That iMessages are somehow more difficult, if not impossible, for law enforcement to intercept. Criminals might then switch to using the iMessage service, which is no more immune to interception in reality, and actually provides police with far more useful data than traditional text messages can. If that’s what happened here, you have to admire the leaker’s ingenuity—but I’m inclined to think people are entitled to accurate information about the real level of security their communication enjoy.

While both scenarios are plausible, both seem fairly cynical as well. I'd like to think that law enforcement is above attempting such tricks, but unfortunately that might just be naive these days.

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Patrick McKay, who has been a harsh critic of some of YouTube's failings when it comes to the DMCA process and various takedowns, has highlighted a very serious issue with YouTube that has received little attention. YouTube now admits that, when it comes to some videos that contain content from certain "partner" companies, it won't repost those videos, even if the video uploaders file a counternotice and show that they're relying on fair use. YouTube claims that it will still keep some of those videos blocked due to "contractual" obligations:

YouTube enters into agreements with certain music copyright owners to allow use of their sound recordings and musical compositions.

In exchange for this, some of these music copyright owners require us to handle videos containing their sound recordings and/or musical works in ways that differ from the usual processes on YouTube. Under these contracts, we may be required to remove specific videos from the site, block specific videos in certain territories, or prevent specific videos from being reinstated after a counter notification. In some instances, this may mean the Content ID appeals and/or counter notification processes will not be available. Your account will not be penalized at this time.

If this sounds vaguely familiar to something in the past, you may recall that a few years ago, Universal Music and Megaupload got into a bit of a spat when UMG issued a questionable takedown of a song promoting Megaupload, which featured a ton of big stars singing the praises (literally) of Megaupload. Megaupload eventually sued UMG, but ended up dropping that lawsuit as a month or so later it had bigger legal issues on its hands, following the US's decision to shut down Megaupload. But, at the time, Universal Music made a strange claim that it had some sort of contractual agreement that allowed it take down videos like Megaupload's. YouTube quickly came out with a statement denying this, but the situations described in McKay's post certainly raise serious questions about this, and clearly suggest that YouTube has made at least some deals that effectively wipe out fair use for some users. I assume it will surprise next to no one that the key example that led McKay to discover this situation... also involved Universal Music.

As I noted at the time of that UMG/Megaupload spat that I believed the real issue might be YouTube's contract with Universal Music for Vevo -- and I suspect that's still the case now. As I said then, part of the "announced" deal was that as part of providing the backend for Vevo, YouTube would transfer over the videos of various UMG artists, such that they appeared exclusively on Vevo. I suspect that's the same thing happening here. Because part of the Vevo deal is a promise that Vevo gets exclusive rights to videos involving certain artists' works, it allows YouTube to simply ignore fair use claims from users on such content, and refuse to ever post them again.

Now, as McKay notes, this is (mostly) well within YouTube's rights. I remember, a few years back, seeing a discussion on some legal blogs about this question. The DMCA implies that if you file a legitimate counternotice following a DMCA takedown and if the copyright holder does not take further legal action, the service provider is obligated to put the work back up in no less than 10, but no more than 14 business days. But, to some extent, that seems questionable. After all, as a service provider, any site has the right to not allow certain content to be published if it doesn't want to. And yet, if read literally, some could make the argument that the DMCA obligates a service provider to put up content even if it doesn't want to. As McKay notes, in this manner, the only liability is to the person who filed the counternotice, and any such liability would likely be pretty limited.

Either way, there's no way to look at this that makes YouTube look good. Following so soon on our other story about YouTube taking down a video on a questionable "terms of service" violation and then refusing to repost the video, it's once again a situation where it seems like YouTube needs to do a much better job handling these situations. While we obviously don't know the details of the UMG contract, fair use rights cannot be signed away, especially by two third parties. It would be a shame if YouTube decided that it would arbitrarily give UMG the ability to deny someone's fair use rights in posting a video.

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wildcat2030:

To celebrate the 38th anniversary of the liberation of Da Nang, the government of Vietnam has constructed the world’s largest dragon-shaped bridge over the Han River. Not only is it the steel bridge the largest of its type in the world, but it is covered in over 2,500 LED lights - and it breathes fire!

What! How dare I ask such a question?

You are a man, perhaps, and you like to read — why, you have visited six different websites today alone. PandoDaily is just one of many fine periodicals that round out your day. Right?

But I’m still going to ask the question, and I am also going to broaden it into an action-oriented one: Is it worth it to launch a digital publication that targets men?

For me, the answer is no.

And so my next publication will target female readers, because I believe that it is the most no-brainer business decision that I can possibly make. When it comes to publishing, women are everything. And, yet, nobody wants to publish for them online.

So with all due respect to my previous baby Bleacher Report, and with all apologies to TheVerge, SBNation, HuffingtonPost, TechCrunch, Drudge, BusinessInsider, Thrillist, Curbed, Gawker — and pretty much every new media property … Here are the tea leaves:

Tea Leaf No. 1 — The Misery of an online advertising salesman

In the early days of Bleacher Report’s sales initiatives, I was part of a two-man team. It was our VP of Sales and I who ran around New York City pitching the top advertising agencies on why they should spend money with us.

And whenever we met with a top-tier agency — Mindshare (Unilever), Mediavest (Proctor & Gamble), etc. — we would give them a 30 minute crash course on why Bleacher Report was the best possible website on which they could spend their brand dollars.

Our VP of Sales was the best in the business. And having one of the founders there to talk about the vision was a great knockout punch. But there was one problem. The meetings seemed to end the same way…

“So, our agency loves what you are doing at Bleacher Report, and we could definitely see ourselves working with you. The only problem is that of our 40+ Unilever brands, only two of them target men.”

So, other than Axe and Klondike Ice Cream, we were out of luck.

It was a shame that Bleacher Report could not compete for Noxzema, TRESemme, Caress, Suave, Dove, Pond’s, Nexxus, Q-tip, or even Ragu. Or about 20 other brands. But, hey, we did as much business as we could for Klondike Ice Cream.

From the business perspective, a male reader is like a tree falling in the woods. If nobody cares that he is there, is he even a reader at all?

As Tim Armstrong liked to point out — before buying a male-focused website named after a famous woman — it is females who control 80 percent of buying power. That matters.

And, yet, so much of the new media publishing focus is still on men. Ironically, in addition to HuffingtonPost, the other major website that Tim Armstrong bought was TechCrunch. There was just nothing else to buy, evidently.

Advertisers want to reach women. Let’s give them what they want.

Tea Leaf No. 2 — Hearst vs. Time Inc.

Time Warner is an outstanding company. And, no, I’m not just saying that because they bought my business and made me sign all sorts of legal documents. Their stock is through the roof, and three of their business units (HBO, Turner, WB) are killing it.

But the fourth sibling was recently voted off the island, with the announcement of Time Inc.’s spinoff. And that was on the heels of some major layoffs.

So, magazines are doomed and their world is going to implode, right? Well, not necessarily. Consider Hearst Magazines president David Carey’s excellent interview with AllThingsD. One of the most important points he makes is about gender.

What are the hallmarks of Hearst’s portfolio? Elle, Cosmo, Seventeen, Marie Claire, Harpers Bazaar, and Woman’s Day. Compare that to Time Magazine, Sports Illustrated, Fortune, EW, and People — the heart of Time Inc.

Sure, there are some female-oriented magazines in the Time Inc. portfolio, but even EW has managed to take a female category and masculinize it. That partially explains why Time Inc. digital runs a 107 percent index for male readers and under-reaches women (per Quantcast).

We don’t have access to Hearst’s financials, since they are a private company, but all indications are that their business is in far better shape than the industry at large. And they have women to thank.

Those of us in new media sometimes feel that there is very little to learn from traditional media. And, on some fronts, we are right. My co-founders and I benefited from having never worked in a newsroom when we put together the Bleacher Report concept and CMS. At the same time, we failed in some important ways, because we didn’t pay enough attention to what worked in traditional media.

Female print publications — especially great magazines — still have life left in them, long after people expected them to be goners. There’s still an art there, and even young women… most young women… women who are too young to remember the iPhone’s launch… love magazines.

New media companies should be tapping into that spirit with great enthusiasm, but for some reason they are not.

So, I will.

The fact that so few new media properties have tried to capture the demographic and the appeal of women’s magazines is mind-numbingly inexplicable. The only possible hack of an excuse that I can think of is, well, that most of the engineers who launch websites are men. And men are funding most of the websites that raise capital.

Thank you, Silicon Valley, once again your groupthink and complete disconnection from the rest of the world is going to be an incredible asset for me.

Tea Leaf No. 3 — Dudes don’t read books

The Spanish word for ‘book’ is libro, a masculine word. That may need to change…

Because if you look at the books that are selling, and you look at the fiction books that have impacted our popular culture (Twilight, Fifty Shades of Grey, etc.)… they are for women.

The social network for book lovers — GoodReads.com — was just acquired by Amazon, and guess which gender embraced it? Yup, it was women. Not so shocking, right?

Until you see how much it reached women. By a ratio of almost 3-to-1, a social network that was simply about books, appealed to women.

The new website I launch is still in stealth mode in terms of who it will reach, how it will reach them, and what the voice will be. But now that I am building an editorial team, I am getting a lot of feedback that books — yes, those thick clunky bricks made of dead trees — are helping to define the next generation of smart young women.

And I want to be a part of it. That’s how I felt two weeks ago, before GoodReads sold for a fortune. Now I want to be a part of it even more.

In conclusion, there is a massive market failure going on right now. Magazines have outlived newspapers, based in-part on their affiliation with women. Not only that, but women have brought novels back into the popular consciousness, with young women leading the way.

With some small exceptions, the major new media ventures of the last decade have bypassed women altogether, and it is a regrettable mistake. It’s a big reason why — for all the success of Bleacher Report, Vox Media, Gawker, and HuffingtonPost — nobody seriously talked about IPOs.

The tea leaves are clear… targeting men is a mistake. And one that I shall not repeat.

[Illustration by Hallie Bateman]

Bryan Goldberg

Bryan is an entrepreneur in San Francisco. He founded Bleacher Report, and currently advises several startups. Previously, he was a failed investment banker. You can follow him on Twitter.

Petman Tests Camo (by BostonDynamics)

After a long battle with cancer — which took away his vocal chords and eventually most of his lower jaw — veteran Chicago-based film critic Roger Ebert passed away on Thursday, leaving a host of passionate film buffs mourning his loss. Many of those fans likely formed an even closer connection to him after he could no longer speak without the aid of a computer, because of his enthusiastic use of Twitter and other social-media tools. He may have been just a movie reviewer to some, but mainstream journalists of all kinds could learn a lot from his example.

Twitter didn’t turn Ebert into a star, of course — he was already well known as half of the Siskel and Ebert movie-reviewing team long before he moved online, and his TV presence in turn came about because he was a popular film columnist with the Chicago Sun-Times. But after he was diagnosed with thyroid cancer in 2002, and had to have a series of operations that eventually left him unable to speak without a computer voice simulator, he poured much of his enthusiasm for life and the movies into Twitter and other social-media tools, including his personal blog.

I’m glad @ebertchicago got his voice back with Twitter.—
Burrito Justice (@burritojustice) April 04, 2013

In a piece he wrote in 2010 for his Chicago Sun-Times blog, Ebert celebrated the role that Twitter played in his life, something he said he never expected to say of the social network that he originally saw as an irrelevant distraction. As he put it:

“I vowed I would never become a Twit. Now I have Tweeted nearly 10,000 Tweets. I said Twitter represented the end of civilization. It now represents a part of the civilization I live in. I said it was impossible to think of great writing in terms of 140 characters. I have been humbled by a mother of three in New Delhi. I said I feared I would become addicted. I was correct.”

The part about being humbled by a mother of three in New Delhi says a lot about how Ebert used Twitter to connect with his readers — and critics. His passing was mourned by celebrities, but he was also more than willing to talk (and argue) with just about anyone who felt like engaging with him, and not just about movies but about plenty of other things as well. One follower who took part in a debate with him remembered how he and Ebert argued about the artistic value of video games.

A @rogerebert tweet is worth as much traffic as a small Digg or YCombinator hit. Crazy. That's some distribution power.

—
Alexis C. Madrigal (@alexismadrigal) August 05, 2012

In a sense, Ebert’s adoption of Twitter was somewhat ironic, since social media has helped to rob traditional movie reviewers of much of their authority — to the point where many newspapers don’t even employ a dedicated reviewer any more. But for Ebert, it became a lifeline, and one that only enhanced his popularity. He also came up with his own rules for how to use Twitter, which are good advice not just for journalists but for anyone:

“My rules for Twittering are few: I tweet in basic English. I avoid abbreviations and ChatSpell. I go for complete sentences. I try to make my links worth a click. I am not above snark, no matter what I may have written in the past. I tweet my interests, including science and politics, as well as the movies. I try to keep links to stuff on my own site down to around 5 or 10%. I try to think twice before posting.”

His interest in new-media tools extended beyond Twitter too: While many media outlets like The Atlantic are experimenting with “native advertising” and Gawker is trying out affiliate links, Roger Ebert started playing around with those kinds of monetization methods over two years ago — making a few of his daily tweets recommendations, with an Amazon affiliate link included. Although he got some criticism for doing so, most of his fans were happy for him to have the extra revenue.

The ultimate example of how being from “old media” doesn’t mean you can’t be great in “new media”: Roger Ebert.

—
Jason Snell (@jsnell) April 04, 2013

But it was Twitter that captured Ebert’s heart the most, because it said it was like having a running conversation — something he could never again have in real life — with thousands of people from all around the world, with all of the ups and downs that any conversation brings:

“When you think about it, Twitter is something like a casual conversation among friends over dinner: Jokes, gossip, idle chatter, despair, philosophy, snark, outrage, news bulletins, mourning the dead, passing the time, remembering favorite lines, revealing yourself.”

Ebert certainly did reveal himself — as human, and vulnerable, and funny, and smart. That made his fans love him and look forward to his reviews all the more. And that is the power of social media in a nutshell.

Post and thumbnail images courtesy of Shutterstock / FeatureFlash

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likeafieldmouse:

Jack Kerouac’s On the Road

“Using a manual typewriter in a New York City loft, Jack Kerouac produced the original manuscript of On the Road during a three-week period in the spring of 1951.

Kerouac produced the continuous scroll by taping pages of semi-translucent paper together to feed the typewriter and write without interruption.

The text is single-spaced, without paragraphs, and edited in pencil by Kerouac.”

Apple’s enormous, modern multibillion dollar new headquarters is running behind schedule and way over budget. Bloomberg Businessweek has the details in a story published Thursday about why the Steve Jobs’ dream campus may turn out to be the most expensive — and fussiest — office building in the world.

From gigantic pieces of curved glass produced in Europe and flown to Cupertino, to prefabbed supply closets and bathrooms trucked in, as well as 15 acres of trees to be planted and underground roads, the building looks to reflect Apple’s famous attention to detail. But what was supposed to cost $3 billion is now reportedly approaching $5 billion.

The building will be green and energy efficient, but, Businessweek reports, it’s the “fit and finish” — the extra visual and structural flair — that Jobs’ design calls for that are ballooning the price. Some of the budget-busting stuff stems from typical Jobsian perfectionism: one anecdote involves the decision to bypass the standard (but imperfect) construction method used for concrete ceilings; instead Apple will cast ceiling molds that will be lifted into place, “a far more expensive approach that left one person involved in the project speechless.”

The opening of the building has been delayed two years until 2016 because the company is said to be working to shave a billion off of the budget. But some investors still aren’t pleased; particularly with the idea of Apple spending on a new building when they could be funneling the money (where else?!) back to shareholders. Says one Apple stock owner quoted in the piece:

“It would take some convincing for me to understand why $5 billion is the right number for a project like this,” said Keith Goddard, the chief executive of Tulsa-based Capital Advisors, which owns 30,537 shares of Apple. “This is rubbing salt in the wound, to spend at a level that most anyone would say is extravagant, at a time when they’re being so stingy on dividends.”

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When Elvis Presley died in 1977, legendary rock critic Lester Bangs wrote a piece on the singer for the Village Voice.

I got taken too the one time I saw Elvis, but in a totally different way. It was the autumn of 1971, and two tickets to an Elvis show turned up at the offices of Creem magazine, where I was then employed. It was decided that those staff members who had never had the privilege of witnessing Elvis should get the tickets, which was how me and art director Charlie Auringer ended up in nearly the front row of the biggest arena in Detroit. Earlier Charlie had said, "Do you realize how much we could get if we sold these fucking things?" I didn't, but how precious they were became totally clear the instant Elvis sauntered onto the stage. He was the only male performer I have ever seen to whom I responded sexually; it wasn't real arousal, rather an erection of the heart, when I looked at him I went mad with desire and envy and worship and self-projection. I mean, Mick Jagger, whom I saw as far back as 1964 and twice in '65, never even came close.

(via @gavinpurcell)

Tags: Elvis Presley   Lester Bangs   music   obituaries

Zynga’s shares are up by 5 percent in after-hours trading on news that the company is launching its first real-money games in the U.K. tomorrow.

The company is bringing ZyngaPlusPoker and ZyngaPlusCasino to U.K. players tomorrow through a partnership with bwin.party, one of the world’s biggest real-money gaming operators. At first, the games will be downloadable or on the web, but Zynga plans to bring them to Facebook and mobile platforms later in the year.

They could come to U.S. players later, but only as state or federal laws will allow. A handful of states, including Nevada and New Jersey, have passed legislation to allow online gambling. Under financial pressures from a long period of slow economic growth, about a dozen or more states are also considering pushing legal online gambling forward.

But many of these laws favor existing land-based casinos ahead of companies that are purely online. Zynga might be pressured to partner with a casino there to make it work, even though they filed an Application for a Preliminary Finding of Suitability from the Nevada Gaming Control Board last December.

As for the launch tomororw, Zynga’s U.K. arm and bwin.party plan to launch games that could include as many as 180 other casino titles like roulette and blackjack over the year. The poker title is basically an online poker room, while the casino title has about 160 familiar betting games.

Zynga already has a very successful Poker title on iOS and Facebook that uses virtual currency. Zynga Poker was the company’s very first social game, the highest grossing app of 2012 on the iOS app store chart, and Zynga’s second-highest grossing title last year behind FarmVille. The Zynga Poker title generated 19 percent of Zynga’s online game revenue last year, or $217.4 million alone, according to its annual report.

So if the company were able to add real-money gaming, which would increase average revenues per user substantially, it could change the character of Zynga’s business fundamentally.

The thing is that real-money gaming is incredibly competitive in the U.K. Even though revenues rise per user, so do marketing costs as real-money gaming companies are pressured to spend an order of magnitude more to lure the most lucrative players. Total revenues may rise, but it doesn’t mean profits increase proportionally.

I finished Evgeny Morozov’s mega-screed The Meme Hustler (“Tim O’Reilly’s crazy talk”) yesterday. If you can squeeze uncomfortably past the acid-drenched ad hominem opener, Evgeny recounts the history of the Open Source vs. Free Software memetic war of the late 1990’s and its relationship to political power:

Ranking your purchases on Amazon or reporting spammy emails to Google are good examples of clever architectures of participation. Once Amazon and Google start learning from millions of users, they become “smarter” and more attractive to the original users. This is a very limited vision of participation. It amounts to no more than a simple feedback session with whoever is running the system. You are not participating in the design of that system, nor are you asked to comment on its future. There is nothing “collective” about such distributed intelligence; it’s just a bunch of individual users acting on their own and never experiencing any sense of solidarity or group belonging. Such “participation” has no political dimension; no power changes hands. … There’s a very explicit depoliticization of participation at work here.

This morning, Matt said this, in response to Wave’s comment/question about empowerment:

@drwave once you’re “there”: making sure you don’t pull up the ladder, making new, better ladders, admitting there was a ladder.

The image of the ladder sticks with me. I entered into awareness of Open-vs.-Free in 1999, when it looked like another Vi-vs.-Emacs thing, an interminable pissing match for nerds. In Morozov’s retelling, the power politics of Freedom and Openness look newly fresh, important all over again. It touches the question of who the ladder is for, who’s inside the tribe deserving of help, and how to think about equity. The Free Software side of the argument framed a bigger community, consisting of users and developers together. GNU's four freedoms name use and study before they name distribution and modification. Order matters, ladders are for everyone.

I spoke at Ragi Burhum’s Geomeetup yesterday, about my recent work on vector tiles for Mapnik. The slides are here in PDF form. One of the subtexts to my OSM work for the past few years has been the ladder-making that Matt describes: a way to make datasets like OSM available to more people who might not otherwise choose to learn the full set of tools needed to work with the raw stuff, but still have important things to say. That includes professional message-makers like journalists but also enthusiasts like Stephanie May or Burrito Justice (on tacos and history). There are commercial answers to this question from companies like Google or Mapbox, but in addition to those it should always be possible to take your message into your own hands, most especially if your message is likely to get under someone’s fingernails. Free software and free data work as one kind of ladder, continually looking back as well as forward, assimilating innovation and passing it down to where it wouldn’t otherwise reach. I’m tempted to call this “trickle down”, but it occurs to me that the pull of gravity is all wrong in that image. Things don’t move from the core to the gap like water flowing downhill, but quite the opposite. Left alone, innovation and capital accrue to where they are already in highest concentration. Collective work and effort are the only forces that can counteract gravity with any regularity.

Here are the slides.

Here is the data. Please tell me if you find it interesting, useful, or need help.

Comments

This is a nice article about how memes are often made or promoted deliberately by financial interests and not because of a spontaneous popular uprising, but mostly I wanted to highlight this statement:

Google's YouTube, not Apple's iTunes, is now the dominant force in music.

I've been convinced for awhile now that YouTube and not Android or Google+ will be their main source of revenue if/when Google's search business wanes. (via @claytoncubitt)

Tags: Google   music   YouTube

Egyptian authorities arrested three men off the coast of Alexandria for attempting to sever an undersea Internet cable. The SEA-ME-WE 4 main line was part of a cable network that spanned the Mediterranean and connects Southeast Asia, the Middle East and Western Europe and has 39 landing points, including Alexandria.

Seacom, a cable operator, said that the attacks reduced network speed in Egypt. The line belonged to Telecom Egypt.

“The armed forces foiled an attempt and arrested three divers while they were cutting a submarine cable,” said an Egyptian spokesperson.

Lines off the coast of Egypt have been cut multiple times, most notably in 2008 when three lines were ostensibly cut by ship anchors. “SEACOM can confirm that at 06:20 GMT 27 March, the SMW4 cable system suffered a cable cut off the coast of Egypt. Earlier this morning, SEACOM had restored all services on both SMW4 and IMEWE cable systems,” read an announcement on Seacom’s news page.

Egyptian authorities are interrogating the men, who remain unnamed.

A federal judge has thrown out a patent claim against Rackspace, ruling that mathematical algorithms can’t be patented. The ruling in the Eastern Disrict stemmed from a 2012 complaint filed by Uniloc USA asserting that processing of floating point numbers by the Linux operating system was a patent violation.

Chief Judge Leonard Davis based the ruling on U.S. Supreme Court case law that prohibits the patenting of mathematical algorithms. According to Rackspace, this is the first reported instance in which the Eastern District of Texas has granted an early motion to dismiss finding a patent invalid because it claimed unpatentable subject matter.

Red Hat, which supplies Linux to Rackspace, provided Rackspace’s defense. Red Hat has a policy of standing behind customers through its Open Source Assurance program.

Rob Tiller, Red Hat’s Assistant General Counsel for IP, said:

“NPE patent lawsuits are a chronic and serious problem for the technology industry. Such lawsuits, which are frequently based on patents that should never have been granted, typically cost millions of dollars to defend. These suits are a plague on innovation, economic growth, and job creation. Courts can help address this problem by determining the validity of patents early and with appropriate care. In this case, Judge Davis did just that, and set a great example for future cases.”

Patent cases have become notorious exploitations of an antiquated patent system. The Red Hat dismissal is a rare one and a validation of the court’s distinction about algorithms in patent disputes.

Uniloc has not responded to a request for comment about the ruling.

Bad news, guys. YouTube is shutting down.

The platform launched eight years ago, and some of us have gotten so distracted by YouTube videos that we’ve forgotten that the whole thing is actually a competition. Or, YouTube never actually mentioned that it was a competition. Either way, that competition, called YouTube, is coming to a close.

To decide who has made the best YouTube video of all time, the company has put together an expert panel of judges, replete with film critics, prolific YouTube commenters, and YouTube celebrities including Charlie from “Charlie bit my Finger” and Antoine Dodson of “Antoine Dodson News Blooper (Original).”

YouTube has over 30,000 technicians working tirelessly to narrow down all the YouTube submissions that have come in over the past eight years. The judges will then spend the next decade discussing which video should ultimately win.

Tomorrow, at midnight, the site will be shut down and all of its content will be permanently deleted. YouTube won’t be ressurected until 2023, at which point the only video on the site will be the winner of this competition. That said, the winner won’t be chosen for another decade, but you can watch the first 12 hours of judging live-streamed from YouTube’s L.A. offices tomorrow.

Talk about slow and steady, right? Will people in 2023 remember YouTube?

Luckily, of the 150,000 submissions viewed by the judges, none of them are judged by popularity. Gangnam Style has the same chance of winning as this.

The winner will get an MP3 player and a $500 creative stipend for their next creative project.

Reactions to this news should be interesting. YouTube is one of Google’s most successful and valuable properties, and it’s a global necessity in terms of easy, made-for-everyone video sharing online. However, Google has been spring cleaning lately, removing Reader and a handful of other products from its portfolio.

Perhaps this is yet another step in streamlining its offerings.

OR, April Fools apparently happens one day early in Mountain View.

*What a class act those guys are. Someone in German industry should invent a gold medal for them.

The Venn Diagram of Irrational Nonsense

Now that Google Reader has been put on Death Row, media and Internet geeks get to play the “What should the next RSS reader look like?” game. (Warning: Only bad-asses allowed.) Digg, which is working on its own reader, is out in front in this game, even while Feedly and Bloglovin might argue that they’ve already answered the question. Well, here’s another one to add to the list, and it comes from the Czech Republic: Skimr.

While Digg appears to be contemplating a feature-rich reader, and Bloglovin is intent on bringing a social layer back into the RSS experience, Skimr is going in the opposite direction. It presents a minimalist reading environment predicated on the notion that users want to skim-read headlines and excerpts before deciding whether or not to read the whole article. So, that’s all it shows.

On the Skimr homepage, you’re presented with a list of the websites you like to keep track of and (so far) nothing more. (Folders are coming soon.) Then, for each feed, all you see is a continuous feed showing you headlines and first sentences of the most recently published stories. Once clicked on, the links direct you to the original websites that published the articles.

Skimr is a consciously stripped-back, minimalist experience. It’s a Zen way to stay on top of the torrent of content published to your favorite sites. Petr Kral, who heads up the project, says he wants the RSS reader to be super easy. “I think of Skimr as a Twitter for websites,” he says.

The Skimr feed

Because he is taking the Twitter approach, Kral says there is no need for “delete” or “mark as read” buttons in Skimr. He wants people to transport their social media reading habits into the RSS environment. You just let your eye scan down the page, and when you’ve had your full, you move on. If you hit something you’ve read before, you’ll know that it’s time to switch to a different feed.

Prague-based Kral is working with a small team on Skimr as a side project. His day job is as a product advisor to the owner of one of the Czech Republic’s largest Internet companies, Seznam.cz, a media and search portal that is the country’s answer to Yahoo and Google. Until a couple of years ago, the Czech Republic was one of the few countries in the world where Google wasn’t the number one search website, and that was partly because Seznam.cz was so dominant. Seznam.cz lets its employees embark on side projects like Skimr, which Kral says is a similar in concept to one of the company’s celebrity-focused properties, Super.cz.

In a case of good timing, Kral actually first built Skimr a few weeks ago, before Google announced that it would be shutting down Reader. While he won’t divulge user numbers, he said that the number of feeds being added to Skimr shot up from a couple per hour to 100 per minute, largely thanks to being featured in blog posts about Google Reader alternatives. Realizing the demand and the opportunity, Kral is now re-building the product’s backend so that it can handle heavy traffic. He and his team are also working on mobile app versions of the reader, for both iOS and Android.

For now, Skimr is not a money-maker, but Kral envisages charging websites for a featured spot on the homepage, and perhaps experimenting with in-app advertising for the mobile versions. Its other challenges will be the same as Google Reader’s, Feedly’s, and Bloglovin’s, and especially the question of whether or not people still want RSS readers in an age of personalized news reading apps and social media. Just yesterday, for instance, we saw Yahoo acquire a would-be Reader competitor called Summly, which summarizes news stories and displays them in a mobile app while delivering a personalized reading experience that adapts to the user’s interests.

For mainstream news consumers, the Summlys and Flipboards of the world will likely be enough, but for nerds and completists who want to keep track of every single item published to their favorite websites, RSS readers will still be important. And in that case, Skimr deserves to be considered among the rest of the new hopefuls – especially if you just can’t stand clutter.

[Image credit: wackystuff]

Hamish McKenzie

Hamish McKenzie is a Baltimore-based reporter for PandoDaily who covers media, politics, and international startups. His first name is pronounced "hey-mish" and you can follow him on Twitter.

“This is way better.” That was the prevailing sentiment at today’s Y Combinator Demo Day where 47 fresh startups strutted their stuff for investors. Compared to the 65 demos a year ago and tedious 75 in August, investors told me this tighter Demo Day was more manageable, the quality of the startups was higher, and it felt like the old YC that earned the reputation as tech’s premier incubator.

The founders who presented today at Mountain View’s Computer History Museum dug the more exclusive version of YC too. “I thought the class size was pretty perfect” said one co-founder of an ecommerce startup who preferred not to be named. “There was a huge round of applause when they announced [how few applicants were admitted]. Everyone felt so much more special.”

Beyond the feeling like they’d won the startup lottery, cutting the class size by a third granted each company more face time with YC’s partners and mentor network. While Demo Day presentations are always meticulously practiced, that guidance may have led the companies to clearer visions of where they were headed. I heard fewer vague ideas where monetization would get hammered out later, and more concrete roadmaps.

Amongst the batch were the typical “Airbnb for X” (Flightcar’s airport vehicle rentals) and “Kayak For Y” (SimplyInsured’s health insurance selector). There was as also a bit of deja-vu. Swapbox, which sets up public lockers for package delivery, was nearly identical to the previous YC class’ BufferBox, which got acquired by Google leaving an opportunity for an independent approach. And WeFunder’s equity crowdfunding platform for startups does almost exactly the same thing as YC Summer 2012′s FundersClub. Great minds think alike, I guess, especially when there are big markets to chase.

There were a fair number of “no-brainers”, said investors in attendance, though that’s not necessarily a bad thing. It just means there were plenty of startups tackling offline problems where people: 1. Hate the experience, 2. Spend a lot of money, and 3. There’s little technology being applied. Wevorce wants to smooth out divorces, Zenefits makes doling out employee benefits easier, and Lawdingo connects people to attorneys. These companies are a bit like modern art. “Anyone could make that!” “Yeah, but you didn’t, and they did.”

Perhaps there weren’t as many crazy moonshots as years ago. Some investors mused that many of the building blocks of the web have been built, so now founders are addressing more discrete problems. However, it can be very tough to tell the difference between a startup that sounds too simple, and one whose simplicity could turn it into a backbone of the Internet.

A handful had the whole crowd impressed, though. Thalmic’s armband that senses electrical impulses to control apps was downright futuristic. And Watsi’s platform for crowdfunding medical care tugged our heartstrings when it showed a little Nepalese girl whose life it saved. Their success will determine that of YC itself now that Sequoia’s funding has been spent. YC has to support itself on exits from its investments from here on out.

Time will tell whether the startups that presented today will eventually change the world. But Y Combinator’s willingness to scale back it size shows admirable modesty. Entrepreneurship has grown into a full-fledged fetish these last few years, and YC grew along with it. To buck that trend, raise the bar, and offer more personal attention took handing out some tough rejection letters. But the benefits could be felt in the excited atmosphere. This isn’t a startup factory anymore.

Today Graham, Jessica Livingston, Garry Tan, and the other YC partners looked visibly less frazzled than at past Demo Days, like they’d been sleeping at night rather than fielding emails from frantic founders. This time they could sit back in confidence and watch the companies they nurtured make their big debut. And I think the startups made their parents proud.

Read more about today’s YC Demo Day:

The Top 7 Startups From Y Combinator’s Winter ’13 Demo Day

Paul Graham Says Y Combinator Is Pickier Than Ever, With ‘Hardly Any’ Bad Startups In Current Batch

Women Make Up 10% Of Founders In Y Combinator’s Current Class

[Image Credit: Inc via YC]

Y-Combinator has made changes since the first of its 15 batches of graduates earned their degrees in startupology – or whatever they get when they finish the 3-month program. The accelerator’s founder, Paul Graham, trimmed by about a third the number of companies he allowed to enroll, from 66 last time to 47 this time, to better focus on the participants. I suppose that means he intends to provide each company more individual attention. And in November, YC introduced its official VC program, which organized access to mentors from firms like Andreessen Horowitz. In the process Graham cut the amount of money each company would receive, to $80,000 from $150,000, which had caused unnecessary tension when disputes arose among founders. Less money, the thinking goes, should result in fewer complications.

Today was Y-Combinator’s Demo Day, held at the Computer History Museum in Mountain View, CA, where I was able to see each company present its product in public for the first time. While Y-Combinator made changes over the past year, there wasn’t a whole lot different about the companies this time around. Less money did not, YC partner Jessica Livingston claims, result in greater fiscal austerity. “It’s not like they were really irresponsible to begin with,” she says. More squishy was the outward impression each company emitted: some attendees told me there was a greater sense of founder modesty.

Really, though, it was no mind-blowing affair. In fact, perhaps the major difference was that the bar opened earlier this year. Last time, booze (wine and beer, actually) was served right before the reception; today it started at lunch, with three-fourths of the day to go. “Maybe it will put people in a friendlier mood,” Livingston says. The move wasn’t a calculated decision. But I guess it does go with the theme of a smaller, more manageable, easier-going Demo Day.

There didn’t seem to be any knockout winners, though many attendees were impressed with Thalmic Labs and its wearable tech product, MYO. The band recognizes movements in a user’s muscles and creates a vivid gaming experience. Still, it did little to combat the common knock against YC. That is, after more than 400 companies have gone through its ranks, only two – Airbnb and Dropbox – have been smash, revenue-spewing successes, leading a handful of successful exits, namely Reddit, Heroku, and OMGPOP.

While I don’t have my Tarot cards handy, I don’t think there’s a big winner in this bunch either. The two big categories this time around were enterprise and crowd sourcing, the latest hyped trend to shake up Silicon Valley. By my count, 19 out of the 47 companies had some sort of B2B component. One was BitNami, an app store for server apps that counts MasterCard, Fiat, and GE as customers, and claims it’s already profitable. Another: Errplane, a service that works with appmakers and alerts them of errors on the backend in real-time. Founder Paul Dix says the company hopes to be on premises by December.

There was also a lot of Kickstarter copycatting. There was BackerKit (to manage Kickstarter supporters), Microryza (a Kickstarter for science projects), Swish (which handles preorders after a company concludes a successful Kickstarter campaign), Teespring (a KIckstarter for t-shirts), Wefunder (a Kickstarter for investors) and Watsi (a non-profit Kickstarter that hopes to fund treatment for sick people). Next year maybe I’ll pitch a Kickstarter to auto-generate Kickstarter imitators.

Today’s event was a far cry from the eight startups the program accepted in its first year in 2005. And even though YC shrank the program by about 20 companies, maybe all the Kickstarter wannabes are proof it needs to scale back even more.

At least one investor, who attended six demo days before this one, was equally underwhelmed. “I would have concern with all the Kickstarter for X companies,” says Jon Soberg, managing director at Blumberg Capital, an early stage venture firm, says. He also didn’t think many of the companies had big market potential, and said other investors he talked to felt the same way. “How many big companies will adopt these things?”

Maybe next time will different.

[Image courtesy: Paul Miller]

Richard Nieva

Richard Nieva is a staff writer at PandoDaily, covering technology and startups in Silicon Valley. He’s worked as a reporter for Fortune Magazine, and wants you to follow him on Twitter.