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Dibs! Obscure Marketplace Company Nabs Former DoubleClick CEO David Rosenblatt.

Tricia Duryee — Thu, 03 Nov 2011 11:00:46 +0000

David Rosenblatt has been named the CEO of 1stdibs, the relatively obscure online marketplace known among antique dealers and interior designers looking for one-of-a-kind furniture, art and lighting.

The former DoubleClick executive, who sold his company to Google for $3.2 billion, had his pick of high-profile jobs, but instead has landed at a company most people probably have never heard of.

You can be sure that between Rosenblatt’s appointment and an injection of capital from Benchmark, that’s about to change.

Both Rosenblatt and Benchmark’s General Partner Matt Cohler will join the company’s board. Neither 1stdibs nor Cohler would disclose details of the investment.

In an interview, Rosenblatt told me that, unlike DoubleClick, this is not an advertising play.

“What was exciting to me about DoubleClick was that it was an opportunity to usher an industry into the digital age,” he said. “I think we have a comparable opportunity here at 1stdibs in the luxury marketplace. That’s what gets me excited about it. It’s not an ads business.”

The company’s obscurity in tech circles did not dissuade Rosenblatt from the opportunity.

“I have never come across a company that is as unknown among the Internet crowd, but is known as well as it is in its vertical,” he said.

Rosenblatt quoted from a Bain & Company study to highlight the size of the opportunity. It found that only three percent of luxury spending was spent online as of 2009, even though the market size totaled $257 billion in 2010.

Already, Rosenblatt said, 1stdibs’ gross merchandise volume of goods (the value of goods sold by dealers on the site) was set to exceed $500 million in 2011. He said the average price of each item sold is $5,000, which sets it apart from other luxury players, like One Kings Lane and Gilt Groupe, both of which are focused on offering daily discounts for items.

1stdibs plans to expand into more categories and geographies for growth. It has already gone beyond furnishings to real estate, fashion, fine art and jewelry. The company is a marketplace, so it makes money by charging dealers a listing fee to post items on the site. Currently, it has 1,200 dealers, who sell 6,000 items a month. Because dealers and sellers connect directly, similarly to eBay, 1stdibs does not stock inventory or have to manage warehouses.

Rosenblatt said he discovered the company through Benchmark’s Cohler.

Cohler said he learned of the site through his brother, a well-respected interior designer who was helping him decorate his house.

Cohler said that countless items in his house were found on 1stdibs. “I was astonished to see how incredibly powerful it was,” he said.

Ironically, Cohler was able to close the investment with 1stdibs and recruit Rosenblatt faster than it took to redecorate his house, which “is never really done,” he joked.

Cohler said that Rosenblatt’s appointment will lend the company the operational expertise it needs to scale a large Internet company. “I don’t think there’s anyone better in the world to take the company forward,” he added.

The 1stdibs marketplace was founded in 2001 by Michael Bruno, who had the goal of bringing the Paris flea market — famous for its one-of-a-kind items — to the Internet.

Bruno, who Rosenblatt calls a charismatic entrepreneur, will continue to play an active role at the company by working on strategy and consulting directly with customers.

Rosenblatt will continue to sit on the boards of Group Commerce, Twitter and IAC.

Got Broadband? Not Sure? There's a Map for That.

Arik Hesseldahl — Thu, 17 Feb 2011 22:30:04 +0000

When President Obama came into office, one of his first significant acts on the tech front was a $7.8 billion broadband stimulus effort, aimed at handing out grants and loan guarantees for projects meant to bring fast Internet connections to areas where coverage was scarce or nonexistent.

Nestled within that amount was $350 million to draw a map showing a detailed, block-by-block inventory of the existing broadband infrastructure in the U.S. It took two years, but the results were unveiled by the National Telecommunications and Information Administration today on the Web site Broadbandmap.gov.

This is far from the first time someone has tried to tackle the problem of mapping existing broadband pipes in order to show where service is lacking. But prior attempts have generally been haphazard because service providers tend to carefully guard the precise maps of their physical plant as competitively sensitive. And prior federal efforts fell short because the maps were based on ZIP codes. If one person in some geographically large but sparsely populated rural ZIP code had access to service, prior federal maps showed that area as “served,” even if the majority of the population didn’t have access. The new map uses the far more granular census tracts.

The map shows some new data that shouldn’t come as a surprise to anyone who’s been following the saga of broadband in America: Anywhere from 5 to 10 percent of Americans lack access to broadband at acceptable speeds. Recall that the Federal Communications Commission last July set a benchmark of 4 megabits per second downstream and 1 MBPS upstream as what it considers acceptable.

Another key finding is that so-called “community anchor institutions” are going without adequate access to broadband. These are schools, libraries and hospitals, where different kinds of services are needed. As a rule of thumb, a school needs about 50 to 100 MBPS for every 1,000 students, and most of the schools surveyed had speeds of 25 MBPS or less, and precious few libraries reported speeds approaching that.

When residential service isn’t available, these are the institutions that people turn to when they need to use the Internet. A few years ago I visited a rural county in Tennessee where the local library had broadband and provided free wireless. If you watched the parking lot after the library was closed you’d often see people pull their cars up with laptops and use the Wi-Fi to work on homework assignments with the kids. Even the local sheriff’s deputies would pull up and use it to check their email.

There was some good news. Alongside the map, the NTIA released a separate report on broadband adoption. It found that 68 percent of households have access to a cable modem, a DSL line or a home fiber connection, up from less than 64 percent a year ago. The usual demographic disparities remain: People living on low incomes or with disabilities, along with seniors, minorities and those with low educational attainment, tend to lag behind other groups in home access. The city-country divide remains as well: 70 percent of city dwellers, versus 60 percent of rural residents, access broadband at home.

But here’s a stat that should surprise you: 28.3 percent of all the people in the nation do not use the Internet, period. That’s down about two percentage points from a year ago, but still means that out of every 25 Americans, seven don’t use the Internet at all. I don’t know about you, but that surprises me.

The Facebook Hedgehog Mascot (And Yelp Competitor) That Never Was

Liz Gannes — Mon, 31 Jan 2011 17:53:19 +0000

Even if it sounds more like a tall tale than it does the truth, a post on Quora from early Facebook employee Ezra Callahan this morning is pretty amazing.

A Quora user asked, “Does Facebook need a pet (Android robot, Twitter bird, etc.) to improve its corporate image?”

Callahan, who joined Facebook in 2004 and was the company’s first product manager, replied that early Facebook president Sean Parker had advocated the company adopt a hedgehog (literally) as its mascot.

At the time, Facebook was working on a Yelp competitor, a would-be revenue-generating product it scrapped after getting venture funding.

Callahan and Matt Cohler (now a Benchmark venture capitalist and Quora’s lead investor) had looked into sending “each participating business a little stuffed blue hedgehog,” and Parker toyed with the idea of buying an actual hedgehog in Nevada, according to Callahan, who insists this is a true story. With Callahan’s departure from the company last year, none of those three are still at Facebook.

Read the full tale here.

I felt a little silly doing it, but I’ve asked Facebook PR for comment.

Please see the disclosure about Facebook in my ethics statement.

Image courtesy Flickr user Claus Rebler.

Paul Graham's Y Combinator Start-Ups Strut Their Stuff and Investors Eat It Up

Peter Kafka — Thu, 25 Mar 2010 10:30:46 +0000

One way you can tell that Y Combinator’s Paul Graham is a big deal: The start-up founders he mentors refer to him by his initials. As in, “PG says we should…” And, “PG always….”

A more pertinent measure of Graham’s influence: His “Demo Day,” when his start-ups strut their stuff after three months of product-building, packs a roomful of Silicon Valley’s most connected investors and buyers. Firms I spotted in attendance yesterday include Google (GOOG), Intel (INTC), AOL (AOL), Accel, Benchmark, Spark and Bessemer.

And I wasn’t looking at name tags that closely. Because I spent most of my time watching the Y Combinator guys (and yes, there was nary a woman among the 26 start-ups) make their pitches, which were generally compelling. And at the very least, enthusiastic. One even included this promise: “This is literally the next Google.”

Gotta love that. I’ll tell you about some of them down the road.

But first, let’s talk to Graham himself about the state of the start-up world, the renewed interest in angel investing, and his definition of a successful start-up. Actually, I’ll spoil the last one for you: “The founders end up rich.”

[ See post to watch video ]

Nokia’s Finnish Forest-Themed Flagship Store Felled

John Paczkowski — Tue, 08 Dec 2009 13:36:32 +0000

According to company lore, the design of Nokia’s flagship store on London’s Regent Street was “inspired by the forests of Finland.” And, evidently, like the forests of Finland, it was a cold, empty place. Because less than two years after opening it, Nokia (NOK) is shuttering the shop.

With poor foot traffic and anemic sales, the store, which, ironically, sits almost opposite an Apple (AAPL) store, never managed to meet profitability targets. Not really what you’d expect from a “benchmark-setting” retail outlet intended to provide “the ultimate shopping experience for Nokia’s wide portfolio of mobile devices.”

An embarrassing defeat for the troubled phone giant and one that demonstrates just how much of a struggle Nokia has competing in the smartphone market these days. Said CCS Insight analyst Ben Wood: “There was no question that the store was trying to replicate what Apple had done and build up the brand rather than shift devices. The question is why that strategy has worked for one company and not for the other.”

Analyst: 750,000 iPhones Sold Last Weekend

John Paczkowski — Mon, 22 Jun 2009 11:40:19 +0000

Piper Jaffray analyst Gene Munster was right. The iPhone 3GS didn’t sell as well as the iPhone 3G did during its launch weekend last year. But it did quite a bit better than he thought.

In an investment note issued this morning, Munster estimated that the company sold 750,000 iPhones over the weekend–25 percent fewer than the one million units of the iPhone 3G model Apple sold during the launch of that device last July, but 50 percent more than the 500,000 he originally predicted.

“The only true benchmark for judging the launch of the iPhone 3G S will be the time it takes Apple to sell 1 million units. Apple sold 1 million 1st generation iPhones in 74 days and 1 million iPhone 3G units in 3 days. We are uncertain whether or not Apple will announce the 1 millionth iPhone 3G S; regardless, we are increasingly confident in our 5 million iPhone unit estimate for the June 09 quarter following the price drop of the iPhone 3G from $199 to $99 in early June and the launch for the iPhone 3G S, where interest in the device surpassed our expectations.”

A few other points worth noting from Munster’s note. The analyst surveyed 256 customers at Apple (AAPL) stores in New York and Minneapolis over the weekend about their preferred OS, the size of the iPhone they were purchasing and the phones from which they were upgrading, among other things (see table below; click to enlarge). In the 256, he found a mix of 66 percent Mac users and 34 percent PC, similar to what he found last year (61 percent Mac, 39 percent PC).

Of those surveyed, 43 percent purchased the high-end 32-gigabyte iPhone 3GS, less than the 66 percent of buyers who purchased the 16GB iPhone 3G last year. And 56 percent were upgrading from an old iPhone–up from 38 percent last year. “We believe this shows Apple is developing brand loyalty not enjoyed by other mobile phone makers,” Munster notes.

“At the outset of the company’s iPhone initiative, one of Apple’s goals was to develop the kind of brand loyalty it has developed among Mac and iPod customers, and we believe they are succeeding thus far. As the footprint expands, and loyalty expands as well, Apple will increasingly enjoy a base of customers who regularly upgrade to the newest version of the mobile phones the company releases in what appears to be an annual cycle.”

Has the Great Online Ad Comeback Already Stalled?

Peter Kafka — Thu, 18 Jun 2009 10:33:26 +0000

Are you one of those types who gets nervous when lots of people start announcing that the worst is over and that happy days are here again, or at least on the way? Then you’ll be reassured by a couple of recent research notes warning that the online ad comeback we’ve been hearing about has been postponed.

Earlier this month, Benchmark analyst Clayton Moran announced that he was seeing “softening online ad trends” and that “recent online activity indicates a further pull-back by large advertisers.” Per Eric Savitz at Tech Trader Daily, Moran cut his rating on Google (GOOG) in part because “large advertisers appear to reducing commitments heading into the summer…we are hearing that April and May were solid relative to expectations but indications for June through August are poor, thus tempering recent momentum.”

Now comes JMP Securities’ Sameet Sinha, also via Tech Trader, announcing that “budgets have declined as advertisers are not feeling as chipper anymore” and that “travel and finance continue to be weak, while retail is exhibiting mixed trends…the initial slivers of hope in May were premature.”

Unclear whether Moran and Sinha are talking about online ads across the board and whether they’re distinguishing between Google’s search ads and the display ads that Yahoo (YHOO) and Time Warner’s AOL (TWX) depend on.

For what it’s worth, my thoroughly undisciplined channel checks– whenever I talk to people who work at businesses that depend on Web ads, I ask them how sales are going–tell a more positive story. We’ll get a better idea in a month or so when the big public players start reporting Q2 numbers.

[Image credit: Filtran]

Business Models Are Overrated! Twitter Raises Another $35 Million

Peter Kafka — Fri, 13 Feb 2009 19:35:10 +0000

See! Twitter did have news to report this week–but not about its elusive business model. The Web 2.0 microblogging-messaging platform everyone (or at least some of us) loves to obsess about has raised another $35 million.

Twitter has added Benchmark and Institutional Venture Partners to its list of investors, the company announced via a blog post today. Spark Capital and Union Square Ventures, which had previously invested in the company, have re-upped as well.

No details, of course, from Twitter about its current valuation. Last month the company was looking at raising $20 million or so at a valuation of $200 million to $250 million, and I’m told the new value is on the high side of that range.

The last time Twitter raised money, a little more than a year ago, investors pegged its value at just under $100 million. What’s changed since then? Well, it still doesn’t make any money. But it has many more users: The company says active users have increased 900 percent in the last year; comScore (SCOR) says the site’s home page now attracts 2.6 million unique a month, up 1,362 percent over the last year.

Anyone who’s ever read anything about Twitter knows that the company still has no revenue and/or business model–I just mentioned it one paragraph ago! So no need to go into that here. But for the record, note that co-founder Biz Stone, at the end of his funding announcement, says the company will indeed use some of its new money to go make…money: “We are now positioned extremely well to support the accelerating growth of our service, further enable the robust ecosystem sprouting up around Twitter, and yes, to begin building revenue-generating products.”

And for a nice summary of the company’s promise and peril, check out this week’s New York magazine. Money quote, literally, from CEO Evan Williams: “We have a product, and we’re working on it,” Williams said, with more than a hint of exasperation. “The money will come.”