Thomas V. Ryan

Threadless on the cover of Inc.

Big congratulations to my new colleagues Jake Nickell and Jeffrey Kalmikoff, as well as the whole skinnyCorp / Threadless team!  Jake and Jeffrey are on the cover of the new issue of Inc. Magazine where Threadless is dubbed "the most innovative small company in America!"  There's a great (and long) feature on Threadless entitled "The Customer is the Company."

Also, on Monday we launched Threadless Prints.  Each week we'll release three new hand-numbered, limited edition screen prints.  Check them out  on the site.  They're beautifully made.

My new gig!

I'm thrilled to announce that I have just joined skinnyCorp / Threadless as CEO.  skinnyCorp operates several online communities, the largest of which is Threadless, a community-based t-shirt company with an ongoing open-call for design submissions.  Essentially, designers from around the world submit designs which are rated by the large and active Threadless community.  The weekly winners are paid a cash prize and their designs are printed onto t-shirts which the company sells.  Founded in 2000, Threadless has been growing rapidly and is the original and leading player in this space.  Also, just recently, the company launched Threadless Kids.

I am excited to be working again in an entrepreneurial, consumer-focused company that bridges the creative world and the web world.  I'm particularly happy that it's one with such a vibrant and passionate community.  I am looking forward to collaborating closely with Jake Nickell (founder/CSO), Jeffrey Kalmikoff (CCO), Harper Reed (CTO), and the rest of the extremely talented team. 

Jake posted the anouncement on the Threadless blog earlier today.  It's a great welcome to begin what I expect will be a tremendously rewarding, fun, and successful partnership.

Hey, you! Get onto my Qloud!

I'm excited to announce my involvement on the board of directors of social music start-up Qloud.  The company's "My Music" application has been live for just three months on Facebook, and has already acquired 1 million users.  That makes it the  #2 music app on Facebook, with more users than Pandora, Last.fm and imeem combined.  If you haven't already installed "My Music" on your Facebook account, please give it a try.  You can get it here.  The "musical poke" feature is novel and I find myself using it a lot to send songs to friends on their birthdays.

Founders Toby Murdock and Mike Lewis and their team have done a great job so far with excellent support from their main backer - AOL founder Steve Case and his team at Revolution LLC.  Directors and/or additional investors include Chris Blackwell (founder of Island Records who launched the careers of U2 and Bob Marley), Ted Leonsis (former Vice Chairman of AOL), Jim Bankoff (former EVP of AOL), Tige Savage (Revolution), Dave Goldberg (former GM Music at Yahoo), and Paul Vidich (former EVP Warner Music).  I feel fortunate to  be a part of this distinguished group helping drive Qloud forward.  The full press release is here.

Today, for Qloud, the sky's the limit.

No more Gmail gardening - Google ups storage capacity

Yesterday morning I woke up and was delighted to see that Google had finally enabled more storage for Gmail.  It comes at a price, but who cares?  I have been bumping up against my 2.8 GB Gmail storage quota regularly for months now, constantly teetering between 98% capacity and full.  It's been annoying and a bit stressful. Each week I've had to devote an hour or so to "garden" my account, ripping out the weeds (messages with large attachments) in order to make my e-mail account work again.  Except they're not really weeds - they're files I would prefer to simply archive.  In fact, the point of Gmail is to never have to delete anything.  It's core to Google's marketing pitch for Gmail, as I am reminded whenever visiting the "Trash" section with the message "Who needs to delete when you have over 2000 MB of storage?!"  Me for one, and probably thousands and thousands of others.  For many of us who use Gmail as our primary mail service and who send and receive large files, 2.8 GB runs out fast.  What was particularly troublesome was there were no good tools on Gmail to make gardening fast and easy.  Despite, Gmail being a generally fantastic product of the world's largest search company, there is no option for searching messages by file size (to determine which messages are clogging storage the most).  Instead, I have been downloading my entire archive to Mac Mail, sorting by file size there, and returning to Gmail to search and delete files one by one.   When on the go, and using Gmail on my Blackberry, I was often stranded since Gmail for mobile doesn't enable trashing messages.  If I received a very large set of photos or presentation mid-morning, I would have to wait until I returned home to garden and restore service.

So, a big "thank you" to Google for offering more storage.  Google sparked a web-mail storage war when it launched Gmail by offering over 2GB for free. Other web mail service providers had been trying to charge users for anything above nominal storage.  In response to Gmail, AOL and Hotmail upped free storage to 2GB.  Not to be outdone, Yahoo recently pursued the nuclear option - unlimited free storage - as it watched Gmail take off.  As a user, I would have preferred Google match Yahoo's price.  However, I think Gmail is a great product and believe Google can easily charge many users for storage.  And while I still think it's a bit ironic that Google doesn't offer some key search functionality for Gmail, it's a non-issue for me now.

Excited about Grockit!

I am excited to be an angel investor in Grockit, an online learning start-up based in San Francisco.  Earlier today, Michael Arrington at TechCrunch wrote about the fundraising.  I have been looking at the online learning space over the past year, initially inspired by the success of MegaStudy in South Korea.  Besides building a very valuable business in its home market through a combination of online and in-person teaching methods, MegaStudy fueled an interesting cultural phenomenon - they turned teachers into rock stars! Top teachers at MegaStudy do the equivalent of stadium tours and, as they walk on stage, the student-fans go wild.  Business Week wrote a great piece on MegaStudy last year.

When speaking to Farbood Nivi, the founder and CEO of Grockit, a few months ago, I was similarly inspired. His vision is to "abolish Education and replace it with Learning."  He plans to do this, in part, through a novel concept called MMOL - Massively Multiplayer Online Learning.  Essentially, Farb believes that students learn best from each other, and he has some great ideas on how to build a business around this concept. He's also got the street cred to build a leading company in this sector, having been a top ranked teacher with Princeton Review for years.  It's very different from MegaStudy, but I like it even more.

Good luck to Farb, his partner Michael, and the rest of the Grockit team!

Congratulations to Last.fm!

I've been a big fan of Last.fm  since joining the site in July 2003.  I can't believe it's been four years.  In fact, now that I think of it, Last.fm was probably the first social network I joined - right before joining Friendster and LinkedIn and a while before joining MySpace.  If you're a Last.fm user and want to connect, my profile is here.

There are many things to admire about Last.fm.  First, it's a pioneering service that's made for die hard music fans.  However, unlike most services built for enthusiasts, it has attracted a huge audience - 15 million registered users.  Second, it has achieved its wild success legally.  That's no small feat in the digital music sector, where companies often color outside the lines (or blatantly infringe on copyrights) in order to attract users.  Third, its founders and team are extremely passionate about the product and the community, and it shows through.  They have consistently innovated with new features and have led the way forward in social music.  Fourth, they love eclectic, independent music and have used Last.fm as a platform to help people discover great underexposed artists.  (Martin Stiksel, a co-founder whose profile is here, shares my passion for the many great underground electronic artists in need of greater visibility).  Fifth, as I discussed in a previous post, they built this company in the edgy east end of London, far from Silicon Valley.  There are many cases of Internet success outside the Valley, but what I admire is how Last.fm used its location as an asset rather than succeeding despite its location. 

Lastly, even though you can tell these guys didn't launch this business just to get rich, that's exactly what they have done.  They hit pay dirt today with a $280 million dollar acquisition by CBS.  Congratulations to the whole Last.fm team for having a unique vision, creating something truly compelling, having a lot of fun, and getting handsomely rewarded in the process!

M-I-C...K-E-Y...C-T-I-A!

I have just flown directly from a stunning nine day vacation in Jamaica to Orlando, Florida for CTIA, the main US mobile conference.  Talk about culture shock!  I'll blog more on the amazing trip to Jamaica soon.

I have not been to Orlando in eight years.  Somewhat embarrassingly, right after we sold my old venture Cductive to eMusic back in 1999, we took the whole team to Orlando for a 4 day party vacation.  Back then, my partners and I debated where to treat the staff as an additional "thank you" for all their hard work.  I actually proposed Jamaica, but Disney World it was.  Our team showed its great wit and spirit by presenting us (the three founders) and each other with logo-emblazed T-shirts that read: "We sold the company and all we got was this crummy trip to Disney World."  I still have mine and wear it with pride.

CTIA is a great show and I've booked a heavy schedule while here.  I'll be at the Enterprise Ireland, Wireless Internet Caucus, and Billboard Mobile Entertainment Live events on Monday.  I'll be at CTIA all day Tuesday and Wednesday, scouring the show for innovative new companies and technologies.  Also, on Wednesday at 1pm, I'll be moderating the main mobile music panel, featuring mobile music honchos from Warner Music, Sony BMG, MTV Networks, Verizon, Cingular, and Sprint Nextel.  I'll also be attending various evening events including the INmobile and Motricity/MTV parties.  Unfortunately, I'll miss the speeches by former presidents Bill Clinton and George Bush (Sr.) on Thursday morning as I fly back to NYC  Wednesday night.

I'll report back after the show.

Joining Bessemer Venture Partners

I'm excited to announce that I have just joined  Bessemer Venture Partners as an entrepreneur-in-residence.  Bessemer is a great firm and, at nearly 100 years old, has one of the longest and most distinguished histories in the venture capital industry.  I will be based in the Larchmont, NY office and will be exploring digital media venture opportunities.  I look forward to collaborating with the entire Bessemer team in its various offices.  On a daily basis, the New York-based partners with whom I will be working most closely are Rob Stavis, who led the series A in Skype, and Jeremy Levine, who sits on the boards of Yelp and Wikia.  I'm really looking forward to it.

CRB your enthusiasm

Internet radio companies are reeling from last week's decision by the Copyright Royalty Board (CRB) to hike performance rates for sound recordings on the Internet.  On their blogs, my friends David Porter and Rags Gupta, both of whom used to work at online radio company Live 365, voice their understandable concern. In his blog, Tim Westergren, founder of popular online radio service Pandora, is urging listeners to write their congressmen to oppose the decision.  "Left unchanged, these rates will end internet radio, period," he said.  Already, large online music companies like Real Networks are appealing to Capitol Hill.  Representative Edward Markey (D-MA) said: "This represents a body blow to many nascent internet radio broadcasters and further exacerbates the marketplace imbalance between what different industries pay."

The new per-stream fees alone are likely to exceed a webcaster's potential advertising revenues for the foreseeable future.  This doesn't include other substantial costs like publishing/songwriter performance fees, bandwidth, and overhead.  On top of that, there are a couple of other proposed changes such as the elimination of the revenue share option.  This could put many smaller online radio companies out of business immediately.

We all saw what happened in broadcast radio over the past ten years.  The double whammy of Clear Channel consolidating the industry and small radio stations (with no spectrum licenses) being unable to to air broadcasts, left listeners with watered down, centralized programming.  As a result, they have been tuning out for years.

As a former indie label owner and major label executive, I strongly believe that artists and labels need to be fairly compensated for their work.  It is unfortunate that US terrestrial radio has been allowed to play music for free in the name of promotion for decades.  It's not so in many other countries, such as the UK.  Furthermore, it makes complete sense that artists and labels are paid fairly for performance of their music on the Internet.  However, a balance must be achieved that enables online radio stations - both large and small - to build sustainable businesses.  Online radio certainly fosters discovery of music and leads to greater music sales.  Without a vibrant online radio community, both consumers and the music industry will suffer.

Start-up culture - a location-based service?

There have been a lot of stories lately about the importance of location, or lack thereof, to an Internet company's success.  Pascal Zachary wrote a New York Times piece recently entitled "PING: When it Comes to Innovation, Geography is Destiny" where, essentially, he argued that Silicon Valley' is the place to be if you want your venture to succeed.  Tom Foremski, In his post yesterday, went as far as saying that "Silicon Valley is rapidly turning into Media Valley--and New York, NY should look out--the capital of the media world is shifting about 3,000 miles westwards."  Come on.

A number of people have argued for and against the theory that location, particularly being in Silicon Valley, is a key success factor.  While the debate is interesting, I'm not going to rehearse in detail the arguments in support (e.g. Silicon Valley gives greater access to engineering talent, money, magic, etc.) and against (e.g. Skype didn't come from the Valley; there's less Kool Aid drinking elsewhere, etc.).

What I will say is that location can enable a company to foster a certain type of culture.  That culture can shine through the company's products and image, and it can be a key ingredient of success.

Wired ran a piece last week called "Web Startups Reboot 'London 2.0'" that detailed the city's burgeoning tech venture scene.  In it, Martin Stiksel, co-founder of Last.fm (which is rumored to be entertaining a $450 million buy out offer from Viacom), praised his company's East End location, saying "if Last.fm would have started in Silicon Valley, it would already be very derivative and bland like most of the projects coming from (that) part of the world.  It's great to be here."  While that is a broad generalization and maybe a bit defiantly Euro-centric, there's definitely some truth in it.  In fact, at least where digital music is concerned, it reminds me of my own experience.

My first venture, Cductive, was an early online music retailer of mp3 downloads and custom CDs.  We started in a tenement apartment in New York's Lower East Side in January 1997 (when it was a lot different than today).  We bootstrapped and angel-funded the company's development over three years until we sold to main rival eMusic, a company then based in Silicon Valley which was publicly traded and had raised about $120 million in private and public equity.  Clearly, both companies were too early.

At Cductive, we had a group of hip, young, modestly paid employees who lived and breathed music.  Even our lead programmer, Bing, was an accomplished DJ.  We worked in a open warehouse loft, where music blared loudly and continuously.  We went out to clubs until late to see bands and mingle with artists and indie label folks.  Our site was edgy - black in color with a cobra as our logo.  This  culture was created partly by design, partly because of limited funding, and partly because we were based in New York.  We signed up hundreds of labels without big advance payments, largely because we knew them and their music.  They felt comfortable dealing with like-minded people. 

Although eMusic was probably the best known first wave digital music retailer and helped kick start the digital music revolution, they were cut from the typical Silicon Valley start-up cloth.  They were overly funded (like most ventures back then) and housed in luxurious but sterile corporate offices in Redwood City, CA.  They had some very talented people, but, at its core, it was a tech company - with a tech company culture.  In fact, the only time I heard "music" in their offices was when someone said the company name.  That was eMusic 1.0. The company is now headquartered in New York and owned by Dimensional Associates (which bought it on the cheap from Vivendi Universal a few years ago).  Now that digital music is mainstream, portability has been solved through the iPod, and the company has continued our original focus on open mp3 (which provides complete interoperability), eMusic is now doing quite well.  It's the #2 music download site after Apple's iTunes Music Store.

eMusic certainly went through ups and downs and was always bigger than Cductive.  However, Cductive would never have gotten as far as it did on a slim budget -- to compete with eMusic so effectively that they had to buy us -- without a street-smart, music obsessed-team and a left-of-center culture.  I feel that we were able to craft that culture in large part due to our downtown New York location.  So, when I hear Last.fm credit their edgy East End home as an ingredient of success, I understand.  In fact, besides strong traffic and community, perhaps it's partly their cool image and hipster appeal that Viacom sees in them.  After all, isn't that what MTV had going for it early on?