E076: with Steve Huffman

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Jason Calacanis hosts This Week in Startups with guest Steve Huffman, Co-Founder of Reddit and Hipmunk

00:01:00  Next Global Startup Meetup will be Sept. 21st at 8pm PST

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00:05:30   Ask Jason – Matthew Hamilton – What are the legal steps I should take to protect my website if I use outside help for reviews and such?

00:07:00  Answer – This is very important and you should protect yourself. It is best to be upfront and tell them the deal you are offering. “Work For Hire” is the most common form of agreement. If you don’t want to spend a lot of money you can licence their work. This can take place in many forms, one time use or limited by medium whereby they own the words but you own them for using a particular medium such as the Internet or digital. These can also be for a set time frame. At Engadget we started out with Work For Hire and them wanted the writers to be responsible for their words which protected us legally to what they write. Reading contracts are very important for entrepreneurs, you should get comfortable with the words.

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00:15:30  The Interview

00:15:45  How did Reddit start? We can a couple starting points but the day we got into Y Combinator is probably the better story. We were seniors at UVA and had a different idea for a startup (ordering food on cell phones). Paul Graham was giving a talk at Havard about how to start a startup. I was a fan he had written all the essays so we went and met him. We met him and he liked our cell phone idea, a couple days later we emailed him to say thank you. He mentioned that he was creating Y Combinator and that we should apply (2005). We applied and were turned down, we were pissed and on the train ride back home he called and said he liked us but not that idea. We arranged to go back up to Boston and had a brainstorming session that turned into what is now Reddit.

00:18:00  Had you guys noticed Digg was becoming a hit? No we had no idea that Digg existed.

00:18:30  What was the inspiration? Slashdot and Delicious

00:19:15  What made Slashdot work? Most importantly it was the communities.

00:20:30  We tried to make Reddit democatic and let the new filter to the top and not curate anything. We tried recommendation engines and they didn’t work and our montra became let the humans do the hard part.

00:20:45  The site has always been pretty much the same correct? Yes, we shoot for clean, simple and content heavy. We never used a designer our approach was to make it look a little nicer. Functionality was very important.

00:23:05  How did you decide what happens when you click the headline? The discussion definitely came up and we focused on the users and what they would want. We weren’t motivated by page views.

00:24:20  Tell me about Y Combinator, you resubmit and Paul says yes, now what? We start bouncing the name around more than the idea. We used stuckdomains which gave us names that were used and now available. Alexis’ side project Breadpig came from typing “read” into the the site. Jason likes OneLook which is a reverse dictionary for brainstorming and inspiration. Getting a good .com domain is sadly one of the toughest things with doing a startup.

00:27:00  What other tricks have you learned to get a great domain name? I don’t have many tricks it something we have struggles with but my rule is if told to someone they could spell it. Jason has a similar rule if you can say it to someone over the phone can they type it in, basically the same concept.

00:28:30  Can you explain Y Combinator? It’s changed over the years, it’s 3 months long, their were 8 of us and we would have weekly dinners and people would come in a speak to us. At the end we had demo day which allowed us to pitch to VCs. At the time was we got $6K for the founders but the terms are negotiable. You get the reputation of Y Combinator behind you access to press and demo day is huge.

00:34:40  Your experience was so good and having succeeded with Reddit, you back again? A few twists of fate moved us back to the Bay area and I asked Paul if we could participate. He said yes we had better terms but it was nice to have an excuse to be in front of the press and a great experience.

00:37:50  Let’s talk about the sale of Reddit were only 17 months into the project. Did you run a process? This guy was hired by Conde Nast to get them back on track online.

00:39:45  What is going on between Reddit and Conde Nast? Conde brings it on themselves they originally let us do our thing but we occasionally would have these issues. We disagreed on a few things and they started becoming bigger issues. They would tell us one thing and then tell us another.

00:44:30  So with all the problems does this make you the internal bad guys of Conde Nast? I don’t think so.

00:45:50  Do you think this happens when you sell your startup. You go to the new owners and are treated worse than someone off the street like you don’t know what is going on? At AOL their were times they wouldn’t return my email. I left on such a low note it’s a shame I doubt they will buy a startup again and it seems like they are giving up on the Internet.

00:47:25  Is their an internal founders group within Y Combinator where you can all communicate? Yeah, we have an email list I get a couple emails a day.

00:49:00  How does life change for a 22 year old something after selling his startup? Life doesn’t change with my friends, things are the same, it’s a non-issue. In the beginning I felt a little guilty but not so much anymore. You shouldn’t feel guilty for playing your cards right.

00:51:00  Hipmunk, we display the flights in a graph format. We are doing a couple cool things we sort by agony, Kayak searches by price. What that means is if a flight is a dollar more expensive and is 2 hours longer you may never see that on Kayak. We feel that people value their time and build that into the results, we call that agony. On the right side we have numbers and when clicked it will show the flights with the same parameters that you’d never take.

00:53:45  You are hitting an API with this correct? Yeah, we get our data from Orbitz. To be fair no one owns the data or the closest to that is ITA which Google is trying to buy.

00:54:30  Do you have to pay for the data? It’s negotiable we send users to Orbitz to buy the tickets and we get a piece.

00:54:50  So could you add a flight tracker to Mahalo or do you want to be a destination site? At the moment we want to be a destination, we are not opposed to it but we are focusing on being a destination.

00:55:15  This is a two person startup and how long to build? 2 months, we’ve been on operation less than a month and we are selling about $70K in ticket sales a day and after 3 weeks we just broke $1 million in sales.

00:56:00  Is their a standard fee you get from Orbitz? It’s negotiable but the standard fee is $3 a ticket and you get a percentage on ancillary sales.

00:57:00  Digg 4 a good idea or bad idea? Based on the user feedback I’d say it’s a terrible idea.

00:58:00  Thoughts on Kevin Rose as an entrepreneur? I don’t know him but he’s done some great things with Digg and Rev3.

00:58:30  The News

01:00:20  Google instant results search

Google unveiled its new twist on search this week with the launch of Google Instant. Basically, Google no longer waits for you to finish typing your query before displaying relevant results. Google’s also worked in a “predictive algorithm” which tries to figure out what you’re searching for before you’re even done typing.

The feature is already live on Google.com, and will be coming to mobile some time this fall.

In response, Bing director Stefan Weitz countered that Google Instant “really isn’t anything new” and that there’s a site that was put up last year doing the same thing with Bing API’s. He also stated that “It’s not about giving you much more links faster, it really is about getting you the information you need to make a decision faster in the format that makes the most sense.”

So, how does this fundamentally change search? And what about SEO? Is it time to reinvent the wheel in terms of strategizing around search results, or are the fundamental rules still the same?

01:01:10   Feedback – (Jason) It’s kind of gimicky but if I start with the noun and do secondary keywords it gets interesting. It will have no impact on SEO. Google is crushing it I love that they are competitive. (Steve) You get the same results and you can’t read the results that fast to be effective but suggest is a great feature.

01:07:15  Facebook overtakes google for time spent on site

According to data from ComScore Inc, Facebook has surpassed all of Google’s sites – including search, Gmail AND YouTube – in Web traffic. Americans spent 41.1 million minutes on Facebook in August, compared to 39.8 million on Google sites. Interestingly, 37.7 million minutes were spent on Yahoo sites. The results, we should add, are not pinpoint accurate, and are estimated based on data from the sites servers and reports from 2 million Internet users.

How significant is this in the ongoing war between Facebook and Google? Think this is mostly due to people getting sucked in to games like FarmVille, whereas their time on Google is just a lot of checking an e-mail or searching for something quickly?

01:08:00 Feedback – (Jason) I don’t trust ComScore’s data, this data is just time on site. It’s a victory but it’s hollow. (Steve) Not to sell Facebook short it’s the only site my Mom and I both use.

01:10:45  About.Me

TechCrunch has released some details about the stealth startup once known as Pumpkinhead, now relabeled “About.Me.” The company was founded by serial entrepreneurs/investors Tony Conrad (a founding partner at True Ventures) and Tim Young (Founder and CEO of SocialCast, and former TWiST guest).

Among the angel investors who have already signed on are True Ventures, Ron Conway, AOL Ventures, Founders Collective and David Mahoney.

The product allows users to create a “personal profile page” pointing people to your content no matter where it is around the Internet, giving you the ability to create a single online identity and destination for yourself. Go to About.me/tonyconrad or about.me/timarmstrong for an example:

http://about.me/tonyconrad
http://about.me/timarmstrong

There’s also analytics tools to let you know how many people are comign to your profile, where they’re coming from and what tehy’re doing once they get there.

Any guesses about what these guys might have up their sleeves?

01:11:35  Feedback – (Jason) This is Flavors.me with a better domain name. It does look nice, ity’s a nice business card. I’m more impressed by the domain name and the pretty photos. I think something else is going on here something around social media. (Steve) People aren’t that interesting, I really don’t want to go to a destination site about my friends maybe a few select celebrities but that’s it. I also suspect their is something more coming.

01:13:30  Seeesmic Desktop 2

Seesmic has released the second version of its realtime dashboard, Seesmic Desktop, after nearly a year in development. Founder Loic Le Meur describes the new product as a “platform for platforms.” Basically, you can now aggregate all of your social media activities in one place with the ability to respond and interact, and it’s all in realtime (so no “refreshing” and delays like you’d get with, say, Hootsuite). In addition to the basic functionality for Twitter, Facbeook, LinkedIn and Google Buzz, here’s also an “app store” where developers can offer plug-ins for other services like YouTube, TechMeme and Formspring and can alter the basic functionality, like adding a Klout score next to everyone’s tweets or having all images appear as a thumbnail preview.

Le Meur also promises that the platform will soon be available on Android, iPhone and Windows 7 mobile devices. Because it runs on Silverlight, it’s likely Windows 7 will be the first up.

Thoughts? Is this still just building a service on top of other services, or does the aggregation of all these different services along with the SDK for developers set it apart?

01:14:30  Feedback – (Jason) Every six months or so I try these services out but they never stick. I just don’t see enough value for a real business. I think after awhile entrepreneur realize they should be going after the big ideas.

01:16:20  Deadpool: Bloglines

IAC will officially shut down its RSS feed reader Bloglines, the company announced this week, which was purchased by Ask.com way back in February 2005 for $10 million. The site will go dark on October 1st.

The site lost a lot of its luster following the release of Google Reader, and as more and more of the industry moved to realtime news streams over RSS, the functionality became more and more outdated.

Doug Leeds, President of Ask.com, explained that the market for people who want to use a service like Bloglines has stagnated, and that people are switching over to realtime news streams like Twitter. According to IAC’s market research, there’s been a 20% decline in people using RSS feeds as a whole.

Sad to see Bloglines go? Is RSS really dead, as this article seems to imply? Can Bloglines or Google Reader’s functionality be replaced by something liek Twitter?

01:17:15  Feedback – (Jason) Yes, my usage of Reader has gone down. (Steve) I find it shocking that it’s not down 90%, who still reads RSS?

01:19:05 Nokia Appoints New CEO

Nokia will replace current CEO Olli-Pekka Kallasvuo with Microsoft executive Stephen Elop in the hopes of catching up to Apple in the smartphone wars. Elop was head of MSFT’s business division, and has previously held top spots at Juniper Networks, Adobe Systems and Macromedia. (He took over Macromedia, makers of Flash, just months before the company was purchased by Adobe.) He’ll take over Nokia beginning September 21st.

On news of the change-up, Nokia’s share price jumped almost 4%. Elop said a key focus would be “to ensure and deliver that end-experience, not only what you think of as a device but all of the supporting elements.”

Kallasvuo joined the company in 1982, and will step down as both president and CEO, as well as giving up his seat on th eboard of directors.

Thoughts on this? What would be your first action as CEO of Nokia to try to catch up with the iPhone?

01:19:45  Feedback – (Jason) Think about it you are know going head-to-head with Apple and Android. This is entrepreneur hell. (Steve) If they don’t choose to create a touch screen smart phone they might be ok.

01:23:00  BREAKING: GoDaddy For Sale?

01:23:30  Feedback – Frank is a genius and will do well.

Check out the Twiip.hover.com for the This Week In iPad branded page.

01:25:30  Around Oct. 1st you will have a chance to see what Tyler is working on. It’s an anti-social startup (Tyler going the contaryrian route )

01:32:48  End

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