Patrick Lor

Pat is a short sighted, destructive idiot.

It's been an amazing month so far. I just started a new job at Fotolia, and the folks at TechCrunch were kind enough to blog about it. Today, we launched a new site - PhotoXpress, and TechCrunch blogged it once again. Registrations and downloads on PhotoXpress were brisk, and we're looking forward to growing this business aggressively. I'm very optimistic about the prospects for both Fotolia and PhotoXpress.

But apparently, Rick Dahms, in commenting on the TechCrunch story about PhotoXpress, says I'm a "short sighted, destructive idiot". (hey, who's he calling short sighted?):

It’s really hard to believe that after all these years there are some people who still think that a profitable internet business model starts with making your product free.

All this does is drive another nail in the coffin of stock photography. As it is, since the invasions of Photodisc, Getty and iStock, it’s almost impossible to make a living shooting stock.

The upside is that once “businessmen,” like Pat, kill stock photography altogether and put the all those photographers out of business, it will all be free all the time. It will all be crap and it’ll be the same crap every year… but it will all be free.

And that’s what’s important.

He goes on to say (in response to Avi, who posted a note in my defense):

No, Avi. Pat is a bad businessman because his business will fail. The thing that seems to be beyond Pat, and also evaded Mark Getty and Jonathan Klein and Steve Davis, and David Norris, is that if your business is destroying the industry that it lives on, the future of your business is limited.

See, Pat is not innovating anything. Pat is repeating a business model that has failed again and again. I’m not “blaming” Pat. I’m saying that Pat is a short sighted, destructive idiot.

Which is technically not “complaining” but criticizing.

Call me what you will, but I'm not short sighted. The most successful businesses in history became successful because they figured out the magic formula. It's called distribution.

In 1912, when Ralph Waldo Emerson said "Build a better mousetrap, and the world will beat a path to your door" his emphasis was on innovation. He was wrong. There are many cases in history where the more innovative product lost out because it had poor distribution. Sony Betamax vs. VHS, for example. (Sony anything vs. it's competitors, actually, but I digress). They can't beat a path to your door if they don't know about it.

Chris Anderson's article (and latest book), Free, explains it quite nicely. In it, he cites two trends that are driving the spread of free business models across the economy:

The second trend is simply that anything that touches digital networks quickly feels the effect of falling costs. There's nothing new about technology's deflationary force, but what is new is the speed at which industries of all sorts are becoming digital businesses and thus able to exploit those economics. When Google turned advertising into a software application, a classic services business formerly based on human economics (things get more expensive each year) switched to software economics (things get cheaper). So, too, for everything from banking to gambling. The moment a company's primary expenses become things based in silicon, free becomes not just an option but the inevitable destination.

The crowdsourced stock photography business was a specialty, niche business that most people used to ignore. That is, until Canon made the DSLR affordable to the consumer. The quality and the quantity of images at these sites increased exponentially because of Canon's technology. And today, it's amazing what you can produce with a sub-$1,000 camera.

Now I'm not saying that just anyone can do what professional photographers like Rick Dahms can do. In fact, very few can even come close. But the reality is, Canon, Nikon and other camera manufacturers have made it so fast, cheap and easy to produce billions and billions of images, that you'd expect someone to take a great picture from time to time.

So if "short sighted, destructive idiot" means "leveraging revolutionary technology to build a business that changes the game", then I can only hope that there's more name-calling a few years from now.

A Conversation With George W Bush.

What you talking 'bout, dubya?

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Cool Blog Links

A few links to some interesting blogs:

Futuristic Play: Andrew Chen, EIR at MDV, has gathered some great insights and analysis on viral marketing, user experience, game design, and online ads. Check out his top 50 list of essays on viral marketing, game design and online ads.

Startup Metrics for Pirates: Dave McClure walks us through the only 5 things that matter to a web startup: Acquisition, Activation, Retention, Referral, Revenue . . AARRR!!

Indexed: Jessica Hagy makes sense of the world with venn diagrams and simple graphs. Simply Brilliant.

Digital Roam: Dan Roam explains how to solve the world's problems on the back of a napkin. Here's the case for Obama.

Brain Rules: John Medina's 12 rules for optimizing brain functions. He also discusses how the brain ignores boring things - it processes meaning before it processes details.  You communicate meaning with emotionally competent stimuli. The brain pays attention to three things: Threats: Will it eat me, can I eat it? 2) Pleasure: Can I mate with it, will it mate with me? 3) Familiarity: have I seen it before? Take care of these 3 things, and you will capture the attention of your audience.

STIRR: Kickin' Butt at Banff Venture Forum

Why am I posing with the winners of best presentation awards at the Banff Venture Forum? Because STIRR PitchLab helped guide two of the companies towards the prize.

Two weeks ago, Manford Kwan, CEO of ASAT Solutions, and Dr. Mary Earle, CEO of TheraCarb participated in a 4-hour session where we concentrated on fixing the first two minutes of their pitch. That's how long you have to capture a potential investor's attention before they start checking their 'berry.

Both of these companies have been operating for over 5 years, and there wasn't anything I was going change in their business models the week before they hit the stage in Banff. So the challenge was to make the pitches interesting enough to attract conversations and get a few more meetings afterwards.

Even though there are 10 pitch tips we review in PitchLab, I've decided to highlight just a few of the more important ones in this post:

• Start Strong & Stay Strong: Don't welcome the crowd, ask them how they're doing, make small talk, or worse yet, come out with a "don't you hate it when . . ." statement. Nobody's going to answer, and you'll feel like a schmuck. Just tell them who you are, and in two or three sentences, give them a reason to believe that you're credible.
• Hearts, Minds, Wallets: Always make an emotional connection before diving into the logic, and always share the logic before asking for money. How do you like being asked for money from people you don't like for things you don't understand?
• Be Attractive: Be confident, but don't brag. Seek guidance, but don't appear desperate. Be passionate, but not emotional. It's a fine line, but you'll be surprised how investors are attracted to one set of qualities and completely repelled by the other.

I didn't realize how powerful these rules would be. When Manford and Mary made their presentations last Thursday, they hit the stage with confidence. And when they got off the stage, they were smiling from ear to ear. In my mind and theirs, they had already won - they were already stirring up more conversations in the hallways, speaking with more passion and enthusiasm than ever. And that's the power of having a good pitch - it follows you right off the stage and into elevators and boardrooms.

At the end of the conference, attendees had voted TheraCarb as best presenter in the Life Sciences stream, ASAT Solutions as the best in the Energy stream, and Akoha as the best in the IT stream.

In the picture: from left to right:
- Austin Hill, Akoha's CEO, simply one of the world's best pitch men.
- Manford Kwan, CEO, ASAT Solutions
- me, the proud pitch coach
- Dr. Mary Earle, CEO, TheraCarb

Sir Terence Matthews: It's not the richest or fittest that will survive.

Legendary billionaire businessman Sir Terence Matthews was at the Banff Venture Forum Friday night, and spoke about enterprise creation in the flat earth economy. First, he broke down the costs: really good engineers in India: $7k/year. In China: $6k/year. In Canada: $70k/year. Telecommunications links: 155 megabit cross-ocean link: used to be $2 million/month. Now: $10k/month. Office space in London: 200 GBP/square foot. Puna, India: $5/square foot. Get the picture?

Sir Terry's message was simple. You can't ignore the fact that we exist in a world economy these days. "It's not the richest or fittest that survive, it's those that adapt. You have to adapt to the competition from China and India". He continues to start new companies at a scorching pace every year, and he starts them right here in Canada. His formula:

1. Use a Mothership. For Terry, it's Mitel. Work with the motherships and develop solutions / painkillers they can sell. Working with a mothership gets you credibility and revenues.
2. Hire Smart University Grads. Terry interviews the top 20 grads from Waterloo every year, and hires 4 - 5 of them. Canadian university graduates are amongst the best in the world, but you have to structure the deal a little differently to make it work. The offer: $25k/year, along with another $50k in equity. Government can't tax it, and there's no spending cash for social activities.
3. Communicate & Motivate. Terry insists on quarterly reports from his managers, and these reports are sent to every employee. In addition, all his companies hold quarterly all-employee meetings, so that employees understand the past achievements and future direction of the company. Employees deserve to be treated like owners. Give your employees confidence that management knows what it is doing, and they will work harder than ever.
4. Passion: Motivated people can do anything.
5. Have fun: work isn't just about making money, it's also about excitement, winning, and working with people you like. (amen!)

The result? Every one of his companies ship products and have revenues within the first year. Simply amazing, by any standard.

Overall, it was a very lively speech which stressed the importance of a smart, motivated team.

Later in the night, I bumped into Sir Terence in the hallways of the Banff Springs, and thanked him for his presentation. True to form, he responded energetically, requested that we exchange business cards, and encouraged me to move quickly on my next venture. Now I know why people work for him for $25k/year! I know I would if he sent an offer ever came my way . . .

DemoCamp Calgary 10

Gord McDowell from Cambrian House set up a bazillion cameras at DemoCamp 10, and put together this great video summarizing the event. DemoCamp Calgary 11 will be October 23, and we're actively looking for a location with a better wifi/av setup. We'll be announcing the location soon at the BarCampCalgary site soon. If you can suggest any locations for a DemoCamp, please let me know.

"You Can't Let Them Self-Medicate"

Bill Bryant of DFJ & Steve Hnatiuk of Yaletown had a little chat on the state of venture capital in today's environment. Bill came up with the line of conference - read on . . . 

Steve: Is this a good time to start a company? 

Bill: Entrepreneurs don't start companies based on timelines. They start companies because they have ideas and passion around ideas. However, they need to be more patient with the exit, and they need to do more with less money. They'll likely have to build entire companies, from soup to nuts for $12 million. 

Steve: Cleantech is all the rage. Where does that leave software & IT in the eyes of VCs? 

Bill: In the enterprise market, a global market has many global 2000 companies downsizing the number of vendors it is willing to work with. I know of one company that has gone from 950 vendors to 4. This makes it tough for startup enterprise plays. In addition, valuations for consumer software plays based on advertising revenues will be tough.

Steve: How do you manage a near-death experience at a venture? 

Bill: Just like patients that have just had a stroke, you can't let them self-medicate. You need to step in as an investor and help lead the way.

Steve: Do you see huge opportunities in the market turmoil?

Bill: Sure, but the problem is, exits are tougher in this environment. 6 - 8 companies have gone public in 2008 vs. 80 - 90 last year. In the near term, things are going to be tough.

BIll: Investors should take a DNH (Do No Harm) approach. Try to add value, but don't get in the way. 

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Banff Venture Forum: Day 1

Presenters from the IT Stream:

Sarath Samaraseka: CEO, www.shopster.com

October 15th STIRR event: Nexopia CEO Boris Wertz

The STIRR crew has been hard at work putting together our next big event - it's happening October 15th, and details are at http://www.stirr.ca 

Above: from L to R, our newest STIRR organizing committee member, Kim McDonald, Sharon McIntyre, and Claudia Moore. Not pictured are Shekhar Parmar and Courtney Sproule. 

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Scud Stud Wins Another Case Against Big Media

Calgarian Arthur Kent has won yet another battle against big media, this time settling the suit that he launched against Universal Studios earlier this year for unauthorized use of his voice and images in the movie Charlie Wilson's War. Earlier in his career as a journalist, he sued and later settled with NBC over the network's refusal to air his stories about the worsening situation in Afghanistan in the early 1990's. He went on to chronicle the experience in a book titled Risk and Redemption.

Kent, who earned his nickname by reporting from the 1991 Gulf War conflict with Scud Missiles firing in the background, tried his hand at politics earlier this year. His campaign ran into trouble, however, when Premier Ed Stelmach canceled an appearance at a campaign breakfast for Kent. That set off a firestorm of criticism, with Kent firing off most of the shots. The Calgary-Currie riding, which has acted as Alberta's protest vote against the provincial government's rural-partisan agenda, was going to be a tough race for the PCs regardless. In the end, Kent might have been more successful had he run against Stelmach.

But no matter - I have a feeling this isn't the last we've seen of Arthur Kent. It's also no surprise that Kent works best without a boss. He continues to report through his site, SkyReporter, and we find him from time to time hanging out at local barcamps. Stay tuned for more.