Insider Chatter by Donna Bogatin

News Years Resolution? Grow your startup into a billion dollar business, NO business model required! NO problem, in Jason Calacanis’ entrepreneurial rule book, as long as you are as capital connected as him!

Calacanis has a $20 million capital kitty in the VC bank for his latest venture, Mahalo, undoubetdly much more than Twitter is working with from Union Square Ventures. So, when will Calacanis see his first Mahalo billion? After all, Calacanis guarantees billions for Twitter within 12-24 months.

At Mahalo, though, Calacanis is counting on his VC money to give him a five year ride, and he is getting his money’s worth: Claim to the title of “the world’s first human-powered search engine” costs a pretty penny. The expense side of the startup equation is ignored, however, in Calacanis’ feel-good, throw out your business model on the way to the startup lottery window world.

Mahalo nevertheless pays dearly in human capital costs costs for its no-algorithms-here branding. Twitter’s free-to-Twitterers largesse is also costing its investors dearly, as Twitter has acknowledged:

We’ve negotiated for good bulk rates but we still pay for this SMS traffic just like we pay for storage, hosting..

Twitter appears nevertheless to be firmly in accord with Calacanis’ exhortation to “get to tens of millions of users and forget about money”:

The idea has been floated that Twitter somehow earns money from your texting while in fact the opposite is true.

WHEW! What a relief? If Calacanis’ wild and crazy musings about Twitter’s growth trajectory were actually to come to pass, what an expensive Tweet Twitter and company would be in!

Calacanis’s throwing startup caution to the wind advice is eerily similar to Web 1.0 style eyeball snatching, VC busting, grow traffic, not profitable sales, “business models.”

Startups beware: Calcanis’ billions can be had for the “critical mass” taking entrepreneurial “strategy” is the venture equivalent of playing the lottery. As millions know, though, there is NO “smart” lottery money.

MORE: Edgeio Web 2.0 Bomb: Michael TechCrunch Arrington Cheers $5 million Startup Loss and Web 2.0 Startups: Will Geek Chumby ‘Fade Away’ in 2008? and Loic Le Meur Seesmic Formula? NO (Big) Idea, NO (Marketing) Plan, NO (Revenue) Model 

PLUS: Startups: Who Needs Business Plans? Draper Fisher Jurvetson, Mayfield, Sequoia… and Want Sequoia Funding? Submit a Business Plan: Here’s How AND Kleiner Perkins Venture Capital: Business Plans Please

WANT TO SUBMIT YOUR BUSINESS PLAN?: Draper Fisher Jurvetson ~ Mayfield Fund  ~ Sequoia Capital ~ Kleiner Perkins Caufield & Byers

NEED HELP IN DEVELOPING A BUSINESS PLAN? CONTACT DONNA BOGATIN

Just six months out of the Mahalo gate, Jason Calacanis already is claiming many milestones, today making the blogosphere rounds to tout his $20 million VC backed venture is the “first search engine to add a social layer.”

Following Calacanis’ personal telephone social demos, the accolades are flowing, Dean Takahashi headlines “Mahalo takes a step forward,” citing the Calacanis’ belief that “humans can outwit the machines.”

While the Mahalo press release, Mahalo How-Tos, Calacanis demos and blog stories hail the power of human “curation” over anonymous algorithms, Mahalo Social, itself, is not very socialable for the 1.8 million uniques Calacanis claims.

In discussing the new Mahalo feature with Calacanis’ last week, I underscored the increasing difficulty in getting users to participate and contribute, as virtually every Web site wants to offer similar “social layers” and to also spur user generated angles. Calacanis concurs but does not believe a heavy participation level is required to build a meaningful level of “user recommended links.”

What IS required for ANY level of user participation, however, is a clear and understandable user call to action, directly on each and every one of the Mahalo human-powered search pages. The Mahalo tag line is “we’re here to help,” but the new Mahalo “user recommended links” feature presents as a bit of a bait-and-switch.

The “User Recommended Links” section of Mahalo pages generally say: “None just yet, you could be the first to recommend a link for XXX.” PLUS: “Know a better link for XXX?”

Clicking on the Mahalo “Know a better link?” leads to a link submission box, which usually yields either an OOPs message and login demand, or an apparent accepted submission, but no apparent posting.

A more sociable way for Mahalo to encourage a social layer would be a more-direct call-for-action that is upfront about registration requirements. Human-powered, or machine-driven, standard usability best practices apply.

ALSO: Reid Hoffman: LinkedIn About Face (book) and Google Zeitgeist: $200 University Payola AdWords Scam and Google Has Insomnia: Mrs. Manber Beats 21,300,017 SERP and AdWords! and Twitter and Facebook: The BIG Illusions of Friendship and Influence

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Jason Calacanis keynoting at the Kelsey Interactive Local Media conference underway in Los Angeles?

Conference producer, Peter Krasilovsky, has been vigorously defending his choice leading up to the conference kick-off yesterday, fending off bad “SEO is bullshit” (Calacanis) vibes.

When I arrived at the conference Wednesday, I underscored to Krasilovsky the irony of Calacanis’ Kelsey keynote as well, but for a different reason, a Calacanis-Facebook one.I told Krasilovsky about Calacanis’ personal blog post last week which used a distastefull pig graphic (below) to portray Facebook in a social graph critique headlined “The wonderful horrible life of Facebook users and their data, or data hogs get slaughtered.”

The concluding Calacanis message to Facebook: “If you are a hog you wil be slaughtered.”

Small world then, that a top Facebook exec would keynote Kelsey in the morning, followed by a Calacanis top billing in the afternoon.

Krasilovsky opened his “conversation” with Calacanis today by referencing the Calacanis blog post I mentioned to him:“So Jason, Facebook was here this morning and you have been critical of Facebook.”I had a question prepared for Calacanis, but inexplicably no opportunity for Q & A was provided. All 12 previous Kelsey keynotes and panels I have attended here in Los Angeles have had ample time for audience questions, a feature greatly appreciated by attendees.Here is my question for Calacanis:

In his Mahalo CEO role, Jason Calacanis is fond of posing questions, business development questions, to LinkedIn members! Mark Cuban also looks for free biz dev advice for his ventures from the “public,” at his personal blog.

Despite having ample resources of their own to procure high-priced, exclusive venture advice in private, savvy and self-motivated Calacanis and Cuban take advantage of the free PR that their Internet celebrity status enables them to garner.

When Cuban announced at his blog “The Movie Business Challenge” in July, billed as an “open job call.” I headlined “Mark Cuban Does the Apprentice, Low Cost Version.” NBC’s “The Apprentice” is billed as “the reality show series in which candidates compete to get hired by famously tough executives Martha Stewart and Donald Trump.” Mark Cuban, at his “blog maverick,” is trying the low-cost, direct route to find new “talent.”

Cuban fans–1160 of them–fell over themselves to pour out their business development hearts, for free, for the profitable advantage of billionaire Cuban:

We already do movie marketing 101. We do buzz marketing. We put up videos all over the net. We set up websites, myspace accounts for the movies and its characters, we work with movie forums, we buy ads, etc, etc, etc. If its been done before, we are doing it.

So if you want a job, and have a great idea on how to market movies in a completely different way. If your idea works for any and all kinds of movies. If it changes the dynamics and the economics of promoting movies, email it or post it. If its new and unique, i want to hear about it. If its a different way of doing the same thing you have seen before, it probably wont get you a job, but feel free to try.

So go for it. Come up with a great idea that i want to use and I will come up with a job for you to make that idea happen. for real.

How real, really though? Cuban subsequently advised that despite 1000 plus words of biz dev wisdom, he learned nothing that he didn’t already know from his legions of free advice peddling fans!

Cuban’s follow-up post to his open call for free biz dev advice, “Wow-The Challenge was accepted…but” puts forth “close, but no Landmark Theatre cigar” style feedback to his 1160 strong free biz dev team:

Shocked and impressed at the response to my Movie Challenge would certainly be understatements…plus hundreds of emails from people who were unable to post to the blog (sorry!)

I’m still going through them but wanted to offer some feedback to those who did, and those who may still want to respond. First, there has not been a “why the heck didn’t i think of that” response. I havent found one that makes me say “Hell Yes, thats the answer”. There were many good ideas, but most of those were beneficial on the margin. Meaning if implemented, they might generate a few more ticket sales, but they would not change the economics of the industry.

BUT, what if Cuban simply took the free public advice, for free! Cuban himself suggests same:

So in a nutshell. No eureka moment … yet. But i love the responses. Certainly quite a few ideas that reinforce the things we are doing at our companies. Certainly some food for thought for things  to do in the future. Im not done going through everything yet, so maybe I missed your brilliance, but I promise, if its there, I will read it and when I find it, the job is yours !

Keep the ideas and discussion flowing !

RIGHT, Mark!

Calcanis fans are better off than the “Maverick’s” legions in giving free advice for Mahalo’s success, because they are offering up their professional opinions in a more private, more professional networking space in order to showcase their talents to the business world at large, not merely to Jason, simply for Mahalo’s account.

Calacanis got a “mere” 26 answers to his latest LinkedIn query, “How would you get Mahalo Daily to 250k daily viewers.” Just as the number of LinkedIn “connections” a member may, or may not, have is a superficial view of “power” LinkedIn usage, so is a quantification of interactions.

Trite, but true, quality really does trump quality.

How does Calacanis himself view the worth of free ideas he asks for and gets at Linkedin? A previous Calacanis answer at Linkedin to a member’s question “I can think up an idea on many different subjects. How can I make money or live from my talent?”:

CALACANIS: Ideas are easy to be honest… execution is everything. Every single day I have people pitching me on all kinds of good/great/amazing ideas and frankly it means nothing if there is no one there to execute on them. You should probably do one of three things:

1. blog about other people’s companies and what they should do with them
2. be a consultant… and tell people what to do with their companies
3. become a science fiction writer

IF LinkedIn members’ Mahalo ideas were science fiction worthy, Calacanis wouldn’t come back for more! In the words of Jason: “Mahalo for any feedback!”

PS: Hey Jason, Looking forward to your keynote at the Kelsey Local Media Conference next week in Los Angeles; I will be helping wrap-up the three day event on the closing “Big-Thinkers” panel!

MORE: Reid Hoffman On How LinkedIn Beats Facebook for Business, INTERVIEW and Sexist LinkedIn: Hillary Clinton and Gender Politics

PLUS: Paglo CEO ‘Nuts’ Over FREE ‘Google For IT’: INTERVIEW and CED Tech 2007: 30 Cool Startups, But NO Facebook Apps

CONTACT DONNA BOGATIN

Jason Calacanis may believe he can dictate the entire future of Web 3.0 in his own Mahalo vision for the Internet to acquiesce to. Steven Krein, however, believes that Calacanis’ Mahalo now is officially vulnerable vertically, thanks to Krein’s OrganizedWisdom. 

The OrganizedWisdom.com homepage is “inspired” by Google. Its touted WisdomCard “hand-edited, spam-free search results pages” look as if “inspired” by Mahalo, the self-described “human-powered search engine.”

Mahalao and OrganizedWisom also share Web 1.0 roots: Both are the products of entrepreneurs who made their Internet marks the first Web go around. Mahalo is a Calacanis production, OrganizedWisdom is led by Krein, the man behind Promotions.com in 1996.

Krein demoed his new OrganizedWisdom last evening at the NY Tech Meetup. While Calacanis is aiming to recruit humans to “write result pages” for “the top 20,000 search terms,” Krein has set a goal of driving the “curation” of 10,000 health focused WisdomCards over the next 12 months; At launch the service includes pages on “more than 100 of the most popular health topics.”

I asked Krein how he compensates OrganizedWisdom “guides” and keeps the “Cards” up to date: 1) $10-$15 per WisdomCard developed and 2) Staff editors monitor developed pages.

OrganizedWisdom obviously can not diss the Mahalo model, as they emulate it. Krein CAN claim superiority in his own health vertical, however, as he does loud and proud. For one big thing, there is an MD on board, Howard Krein, Chief Medical Officer. According to Dr. Krein:

No other search engine has physicians guiding every search result. Each and every WisdomCard is reviewed by at least one physician. 

A search for “necrotizing fasciitis” (aka flesh eating bacteria) on the two sites backs up OrganizedWisdom’s we trump Mahalo health search queries claim.

While Mahalo has not written a result page for flesh eating bacteria “yet,” OrganizedWisdom has organized top picks for “necrotizing fasciitis.”

Currently financed by founders and management, Krein said OrganizedWisodom will soon close a Series A round of venture funding.

Krein has not claimed to drive Web 3.0, as competitor Calacanis does, BUT he has made an OrganizedWisdom claim to own the health vertical in the human search battle, at the expense of Mahalao (be it Web version 1, 2 or 3!).

ALSO READ CEO INTERVIEW: Google Health at Risk: Healthline Medical Search Snags Power Partners, and Money

PLUS: HealthVault: Microsoft to Beat Google Medical Search Thanks to MOM!

ALSO:Mint CEO on Web 2.0 Nonsense AND Who Needs Wesabe: INTERVIEW and Y Combinator to Hackers: Dream SMALL and Code for Google on the Cheap

AND: Social Fireworks Alert: LinkedIn vs. ‘Loud Mouth McClure’?

CONTACT DONNA BOGATIN

The Scobleizer Facebook juggernaut is full steam ahead. With his “friend” count now at 4775, it is perfect Scoble timing to double down on his Facebook rules the world scenario: After all, if Facebook wins, wouldn’t the top Facebookers as well?

Are the friendliest Facebookers really that friendly, though? Scoble acknowledges his Facebook “friends” aren’t really, in explaining why he doesn’t personally email all his friends:

I find I have too many friends, even if you count just the “real ones” tht I’ve had a beer with as a friend.

For Robert Scoble, Facebook Web domination is a given–who needs Google, even! Facebook deserves even more, though: Next Facebook step, the real world. After lunching with a Facebook exec, Scoble was inspired to dream big, for Facebook.

Welcome to Scoble’s Facebook Hotel, really:

Think about how a business would change if it knew every one of its customers had a Facebook account.

I was thinking of a hotel/casino where when I walked in the iPod in the room was playing the music that I had set as my favorite on my Facebook profile. The digital screens in my room had all my photos and some random photos from my friends. My favorite movies and TV shows were on the video device. The bar knew my favorite drink and how I liked it made. That got me thinking about how I’d change my business after I knew everything about my customers.

Oh, one thing? In my Facebook Hotel anyone who just attacks me would be deleted.

TechMeme, Mahalo are NOT deleted from the Scoble future view of the world. Google now deemed to soon be be old news, though.

SURPRISNG, given Scoble’s previous Google props.

June 6: “TechMeme, not quite Google News”:

TechMeme really wants to be Google News, it seems. I see less and less blogs on TechMeme lately and more and more “professional news.” The problem with that shift is that Google News already does “professional news” a lot better than TechMeme.

May 17: “Google to Yahoo and Microsoft: the $1.65 billion was worth it”

Google just distanced themselves from Yahoo and Microsoft. By putting YouTube’s results into Google’s main engine, Googel ensures it will have better searches than Yahoo and Microsoft. I love Google’s strategy. Google just put Microsoft’s Internet strategy in a box. If Google were justg playing chess I think they just said check. And you wonder why the rest of the industry is talking about FOG (Fear of Google)? Exactly.

Scoble WAS wary of Google knowing too much though.

April 24: “Google tracking my history”:

I turned on Google History. I’ve gotta admit, that really freaks me out to see all my surfing behavior tracked and displayed in my face.

ODD that Scoble is OK with the Facebook getting in his FACE!

Scobleizers’ commenters are not all pleased:

HavingFun: Facebook is just a bunch of personal ads. Sure, you get others blog posts, but that’s because they don’t have a blog.

Truden: Pushing your web site content through Facebook and all social networks is the most used technique by the weblog money makers. Yes, you don’t see your content in Facebook and here is the catch - the other users see it (all your 4,775 friends). Isn’t that “pushing content”? I doubt that you read all of your friends. You’ll notice only the most active from them. And because you are the most active of all, all of them will notice you and read you. Make sense, eh?

Facebook is not a bad place especially for lonely people, but when one like Scoble is stuffing it up so hard in my nose, I start to feel like Scoble is attacking me for some reason.

Jonathan Trenn: Facebook Hotel sounds positively Orwellian. Big screens that tell your data. RFID cards that automatically tell others your interests. I’ll save a few bucks and stay in a Motel 8.

Josh: a place that I’d never ever ever want to book a reservation at (course, carried to an extreme I probably wouldn’t even have to book the reservation, it’d just know ). The levels of customization companies can take advantage of to offer good customer service, could be amazingly useful, but it also freaks me out. I think it prevents us from exposure to the dangerous, possibly thought and preference-changing, elements of the unknown.

I mean, I both need and want to hear new music in order to be able to ever list it as a “like.” Sometimes I hear that new music from friends, sometimes playing in a store, or even a hotel lobby. I don’t want my hotel room to automatically be showing me my photos on digital displays. If it did, they risk becoming mundane and boring, rather than important and dear. Let me live out my trip to wherever, experiencing the new as opposed to the known.

The great sadness in molding experience to predefined customer preferences is that we seal ourselves into some time passed, that was captured in memory and tastes, and we discourage growing beyond that.

In other words, beware the treacherous weeds within the Facebook walled garden.

ALSO: Lending Club $108 billion Market Opp ex Facebook: Goodbye Banks! EXCLUSIVE INTERVIEW and Dave Morin: The Matt Cutts of Facebook

CONTACT DONNA BOGATIN