E078: with Alex Iskold

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Jason Calacanis hosts This Week in Startups with guest Alex Iskold, CEO and Founder GetGlue)

00:00:00 Intro

Today on This Week In Startups we chat with GetGlue CEO Alex Iskold. Shira Lazar of CBS joins us for the news, and it’s revenge of the frogs when we take a Shark Tank call from Paris. All that and more, right now on This Week in Startups.

We’ve got a great show today. Alex Iskold the founder and CEO of Adaptive Blue, the company behind GetGlue will talk to us via Skype.

If you want to be on Shark Tank or Ask Jason, which are people’s favorite part of the show, all you have to do is email askjason@thisweekin.com and give the details of your question and Lon will get you on the air. Don’t make it to promotional. Ask an insightful question.

00:01:20

The next Startup Meetup is Tuesday 9/21 at 8 PM PST at the Mahalo headquarters here in Santa Monica (902 Colorado) we’re going to have a little Chinese food. If you want to host a Meetup in your area, just email lon@thisweekin.com . Lon is the creative director of the ThisWeekIn Network who’s doing a great job building the network. There will soon be 20 shows in the next several months.

00:01:55

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DNAMail has sponsored all 78 episodes. They are the longest running sponsor on the show. We couldn’t do it without them.

00:03:00 Shark Tank

Our Shark Tank caller is Oliver from Super-Marmite, calling using Skype from Paris. Super-Marmite was the winner of the Paris Startup Meetup last month.

Super-Marmite is a social marketplace for home menus. Rather than going out for fast food, users can tap into the extra capacity of food being cooked by people around you. In this way you get a home-cooked meal and avoid wasteful leftovers. Cooks are rated and receive a reputation based on the feedback from those buying their food.

JC: You are crowd-sourcing dinner. If you happen to be cooking dinner in your area, and have some extra capacity, you can sell off the extra servings. Last year I make cassoulet. It takes several days to make. I can say, “I’m going to be done on Monday. I have 8 extra servings and I’m willing to sell them for $10 a piece.” Your website would then let people buy it, and if they like the taste of it, then they would rate me highly, and the next time I make it, I might be able to charge $12 per serving. I think your pitch was an 8 or 9. It was very good. I would have liked to hear the business model. I think the idea is bizarre, and wonderful and quixotic. I don’t know if this will work in the United States, but I think this could be a big business in France where there’s a little more social trust. I would like to see this integrated with my social networks. Tyler, what do you think?

TC: I think it’s brilliant. Idea is a 9.5. Pitch is an 8.5. I would improve it by starting with a question. “Jason, when you came to France did you go to McDonalds?”

JC: “Wouldn’t you have liked to have a home cooked meal?” Actually, I think that’s a great angle. What a wonderful insight…Offering this to tourists would be bigger than offering it in the city.

TC: It’s similar to Ubercab in the way it empowers people to earn revenue in a way that they never would be able to otherwise. Restaraunts are probably going to hate this, but in reality, that’s the best thing that could happen to this.

JC: When the restaurants are protesting you know you have arrived.

Scores from the Chat Room averaged 7s and 8s.

JC: I give the idea a 9. I think there’s still room for some improvement. Boy this is a winner, and I love the design of the site. Looks beautiful and is very well produced. The URL is Super-Marmite.com.

How long did it take to build the site, and with how much money? We are four people and it took 3 months and $2500 dollars.

JC: I think you’re going to be very successful and I can’t wait to come to Paris and try it.

00:13:00

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0:16:00 Interview

I have been waiting to have our next guest on the program for a long time. He has fascinated me with his products. It started with a blue bookmarking tool that was very well done. All the sudden it takes off. I see they redesigned their website and now allow checking for movies, books, and everything.

Alex Askold welcome.

You started the company when? 2007.

Right around the same time as Mahalo, I remember. Didn’t you used to be a writer? This is my second startup, and I did do some articles.

How did you start Adaptive Blue? What was the original mission? How did you get to where you are today? We started the company with the vision to connect people around entertainment and things that they enjoy. Our first delivery was the toolbar., which is still very popular. The idea was that when you would go to different websites you could see your friends. In 2009 we re-launched the website with the name GetGlue, and then the service really took off. The idea that we want to share entertainment with each other is still at the heart of the service.

00:18:26

Why didn’t the service take off originally? What did you learn from the first two years, then when the service popped? The process of any startup is iteration and trying to find something that resonates with people. Number one, you need a product that people want. Then you need a market that pulls people in. I think that our initial solution was a utility…[Lost Alex]

Tyler remembers this being a social network that travels with you.

0:20:00

Jason does a quick demo of the GetGlue product. He confesses he loves wiener schnitzel.

0:21:35

Alex is back and continues to explain that entertainment is a deeply emotional experience for people so the product needs to invoke emotions and excite people. It can’t be a utility. As we iterated we landed on a delivery that has grown very healthy in the past several months. Ratings and checkings have been growing very healthy.

0:23:19

What is the impact of the stickers and how does it work? This is one of the things that we discovered and that are working really great. The twist is, they’re both digital and physical. Not only can you get a sticker for your profile, you can actually get a free copy of the sticker in the mail. People have really loved this. A lot of our stickers are now coming from major brands, HBO, FOX, Showtime, PBS and over a dozen major brands.

0:24:31

These stickers have become a marketing tool. Do you get HBO to pay you to distribute them? How do you distribute them physically? Do you mail them stickers? Yes. Once you get a certain number of stickers, we ask you for your address to mail them. In terms are non-monetary, and they’re done for co-promotion. They are telling they’re viewers to GetGlue. For us to be associated with big companies is great for us as a small startup.

0:26:00

How do the brands feel about you doing without permission? Are you allowed to do that? All of the stickers we have on the service are authorized. They’re all official and authorized.

0:26:58

You got the idea for stickers from Foursquare, they’re badges? Yes.

0:27:10

How is that going to make you feel when Foursquare or Gowalla starts giving away physical stickers? Are you worried about that? Has it happened yet? I’m definitely not worried about people knocking off the idea. I think it’s an interesting twist. I think the rewards will lose their meaning over time, and much more important is our strategy to deliver discounts to the users. The ability to award customers with discounts is the goal for all of us, for Foursquare, our sister company, and for us as well.

28:15

How many people in the company and what’s the funding? What’s next? We are 15 people in the company and we are funded by USV and RRE. In terms of what’s next. We’re focusing on bring on more partners. More big brands to make their rewards available to our users. We want t be a platform for entertainment checkins. The we want to nail down the discount piece.

0:30.25

Jason unveils the ThisWeekIn stickers that are rewards on GetGlue. How did these come about, and how do people get these? I worked with Amanda and Lon on these. Alex describes the stickers and how to generally get the stickers. One of the stickers include Jason and his bulldogs (Taurus and Fondue).

0:32:25

Where do you think this is all going? Facebook is appropriating tech from other companies. Are you worried about the big bully on the block? I don’t spend a lot of time thinking about it. Everybody is competing for eyeball. My view is that we have an edge in our focus and the emotions and that’s not easy to replicate.

34:22

Why did you choose Fred Wilson and RRE? Tell us a little bit about each VC and how you chose them? We’re based in NY, and geographic boundaries do matter. USV was so much more informed and qualified to invest in the early stage. An RRE associate reached out to us, and we began to talk. It became clear they were a great partner.

36:00

So you replied to an associate email and didn’t delete it? We reply to every email. It’s the secret of how to build a large network.

36:35

You see these emails as a chance to build loyalty? Absolutely. Go check twitter. You’ll see that we respond nearly instantly to any question whatsoever. We try to be lightning fast. One of our number one goals is customer service.

37:26

How much funding? (NBeezy) and what was your philosophy? About 6M to date. 1.5M in a servies A and 4.5 in series B. Our philosophy is ‘don’t raise more than you need’. We try to keep it lean.

38:00

With Twitter and Foursquare in the same portfolio and having just raised big rounds, are there any VCs advising you to raise power rounds? Options come in when you have success. We’re discussing options.

38:50

I’m assuming you have 2M uniques a month? 1.5M uniques in August.

39:00

Ballpark, how much does that cost to run? We run on EC2

Tyler, your thoughts? I remember the tool bar, so this is a pivot. It’s interesting to see how that idea came about.

I think this might be one of the greatest pivots in a while.

Alex Back—

Take me back to the moment when you decided to kill the blue organizer? I was reminded the Twitter started as part of Odeo. For us it was an iteration. It takes time to get a product that resonates. Thankfully we had great investors.

42:02

How did you become an entrepreneur and where are you from originally? My first company in 2000, was making tools to find bugs in code. I sold it to IBM three years later. I’m originally from the Ukraine.

42:35

When did you come to the United States? 1991

42:40

How old were you then, and how hard was it to get here? I was 19. It was a great thing for me and my family to move to US. I don’t think I would have had the same opportunities.

43:15

What are your thoughts on the H1-B issue, the Untied States becoming a little xenophobic? What are your thoughts on a personal basis? If you spend time educating people, you may as well take advantage of the innovation and give them jobs. We should be on the forefront of smart people coming here and then being able to stay in the country.

46:15

BoonUK asks-How much does it cost to keep this all running? Servers are running on the Amazon stack. We’re using Simple DB, not MySQL. The costs were around 2-3K per month, and now they are more than 10K. But the Amazon stack is great.

48:00

But there is a point where owning your own hardware makes sense, correct? Yes. I think the amount of traffic from Twitter and Foursquare requires that scale.

48:30

Go get GetGlue, which is available for iPhone, iPad and Android. The mobile url is www.getglue/mobile.

Follow Alex on Twitter @AlexIskold.

Rate the guest, and rate Tyler’s performance. Guest: Tyler:

51:20 News

Shira Lazar welcome to the program.

Yahoo executives have spoken to journalists about their future plans, including an ambitious strategy to revitalize the company expected to take up the next three years. Chief Products Officer Blake Irving has said the overall effort is designate o “bring cool back to Yahoo.”

Among the planned changes:

– Relaunch lots of products with new features

– Be more technology-oriented rather than media-oriented

– New Yahoo Mail that’s spam-free, faster and integrates with Facebook and Twitter

– New search layout with more focus on content and news

– New iPad app

– New ad formats

TechCrunch reported that, internally, Yahoos goals amount to an increase in unique visitors to 1 billion from 622 million today, and an increase in revenue from $6.5 billion to $10 billion.

QUESTION: Anything intrigue you about this plan? What would you do if you were CEO of Yahoo to revitalize the company and brand?

0:53:13

JC: This was not a good move. There’s no substance to the announcement. Show not tell. It doesn’t matter. In a world where Steve Jobs, Evan Williams and Mark Zuckerberg can show product, this is a bad move. This screams to me of desperation.

TC: It’s interesting. A guy on stage saying we’ve made something special. When’s the last time Yahoo did that?

00:56:47

Verizon Won’t Sell Windows Phone 7 at Start

Verizon has announced that it won’t sell handsets with Microsoft’s Windows Phone 7 OS when it debuts later this year.

The carrier plans to support the new OS eventually, possibly by 2011, but the news nevertheless is a blow to Microsoft’s hopes at reaching the widest possible market. Most recently, Microsoft and Verizon had partnered on the Kin, a project which was canceled after 2 months due to poor sales.

Microsoft declined to say which carriers will release Windows 7 phones or when they are expected.

QUESTION: Why does Microsoft seem to fare so poorly in mobile? Considering that the iPhone isn’t available on Verizon, is this how big of a disaster is this for MSFT?

JC: This isn’t so much Microsoft doing a bad job, but rather the iPhone and Android doing such a great job. They are like a startup in the mobile space. Microsoft has to build products that can stand on their own.

TC: Pickup of the last point. Where do the developers want to go? How does Microsoft how to compete?

JC: Zune, Xbox and Bing all very well done products. They need a passionate front man for these products. They should open source some of the products to get some press and huge kudos. It’s the innovators dilemma.

1:01:32

Fraudulent Groupon Deal?

Groupon this past week offered a photography deal in Atlanta that took an odd turn when it was revealed that the photographer had promoted her work with stolen images and that they were not capable of actually fulfilling all the deals that were sold.

The promotion, for Dana Dawes Photography, advertised $65 for a one-hour photo shoot, plus a DVD of the images and an 8×10″ print. However, it turned out that she was not equipped or qualified to deliver on this promise, and a Groupon user actually pointed out that this deal was essentially too good to be true. (Would it even be possible for a small photography studio to handle hundreds of jobs like this?)

The deal was eventually pulled byGroupon and everyone got refunds.

QUESTION: Is this a flaw in theGroupon business model, or something that can easily be dealt with and eliminated? ShouldGroupon supervise the system to ensure that it’s not over-extending the small businesses who use it?

JC: We call this a high class problem. Andrew is one of the top 5 CEOs in the country. He’s addressed this head on. He wrote a blog post . This is exactly what a CEO should be doing. Groupon is an amazing business. This is the fastest growing company in the history of the United States. They will go public and be worth more than Yahoo.

TC: Facebook has users andGroupon has customers. It’s that whole point. They’re right at the pocket transactions.

1:06:50

Goodbye from Lalawag

Venerable LA tech blog Lalawag has announced that it was close its doors this week after 2 years of insightful reporting about the local tech scene. (Full disclosure: Lalawag founder Sean Percival hosts our show, “This Week in Social Media.”)

Sean and wife Laurie explained that, with their new baby and his high-powered MySpace job, they were simply too busy to keep up with blogging.

QUESTION: Were you a regular reader? Is this a void that another blog will need to fill? How will you keep up with LA Tech now?

JC: Niche of a niche. They posted once every 3 weeks. He’s getting attention for something that’s been dead for 6 months.

TC: I remember when it came out and it was a vehicle for Sean to promote himself.

1:09:13

ChaCha Dumping T-Mobile?

Q&A service ChaCha, which sends users answers via text message, says they will stop sending messages via the T-Mobile platform. T-Mobile has announced their plan to charge $.0025 per SMS sent over the network, even though services like ChaCha already pay a fee per month to send the messages.

ChaCha currently relies on T-Mobile for 12% of their traffic, a total of 125,000,000 messages per year.

SMS-based startup 4INFO had a similar reaction, and may also drop T-Mobile if the plan goes forward.

QUESTION: Think it’s worth T-Mobile to make this change, even if it upsets some customers? What would you do if you were running ChaCha about this?

JC: This is just stupid. They’re shooting themselves in the foot. Who cares about Cha Cha.

1:10:25

What are your thoughts on YouTube Live?

YouTube recently did a test with live streaming. They went live for a few days with RocketBoom, HowCast, and YoungHollywood.

Are you surprised that it took them this long to get to live streaming? And what is the future? And How does this impact other live streamers?

JC: Yes it does impact the other companies, it validates their business model. And it means that some company will buy them for a lot of money. They picked the wrong partners. They should have gone to Leo Laporte, or they could have gone to Sirius Radio or something like that. But YouTube is very loyal.

TC: Tyler shows off his automatic insight generator. TylersInsights.com

JC: That’s fantastic, but what are your real thoughts?

TC: It’s interesting that it’s taken so long to do. I do think this will hurt the other live streamers in the space. It makes me wonder if this is why Apple has waited so long to integrate live streaming.

1:15:20

Thanks to all the participants. Thanks Trada. Thanks DNAMail. They are making this content available for download.

Thanks to Robert Johnson (rajjr_tx) for helping with the blog. And thanks to Scott Simko for all his great work. He is moving on.

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